BILLIONAIRE businessman John Caudwell has delivered a significant blow to Labour after saying the Conservatives now appear to be the “only electable party”, less than two years after he switched his support to Sir Keir Starmer.
The Phones 4u founder, who previously gave £500,000 to the Conservatives under Boris Johnson before backing Labour at the 2024 general election, has revealed that he could support the Tories again if the party adopts policies designed to reduce taxation and encourage investment.
His comments were made in an interview with The Telegraph, published on Friday, August 21, in which he expressed disappointment with Labour’s performance in government and criticised its approach to taxation and business.
Mr Caudwell had supported Sir Keir after being persuaded by Labour’s promises to pursue economic growth, create a more business-friendly environment and develop Britain as a clean-energy superpower.
But his enthusiasm for the party has since cooled considerably.
“At the moment, the only electable party to me seems to be the Conservatives again,” Mr Caudwell told The Telegraph.
“I do not think the Labour Party is electable.”
The billionaire businessman has become increasingly critical of tax increases under Labour, arguing that government policy is encouraging successful entrepreneurs and wealthy investors to take their money and businesses overseas.
He said Labour had failed to live up to its promise to be “really business-friendly” and made clear that economic growth would be central to deciding which party receives his future support.
“At the moment, the Labour Party 100pc is not that party,” he said.
Mr Caudwell has not, however, given the Conservatives an unconditional endorsement.
He wants Kemi Badenoch to pursue a more ambitious programme of tax reductions and believes environmental technology should be used to attract international businesses and investment to Britain.
Rather than treating environmental policy principally as an expense, Mr Caudwell believes Britain should seek to make money from the development of cleaner technologies.
He told The Telegraph that Mrs Badenoch was “not really there on the environment properly yet”, but said that, if she appeared likely to enter Downing Street, he would seek to influence her approach.
“I would like the Conservatives to really get their act together and put into practice a lot of the things that I have been preaching,” he said.
Mr Caudwell is one of Britain’s best-known entrepreneurs. He developed Phones 4u from a small mobile phone business into a major independent retailer and sold the wider Caudwell Group for around £1.5billion in 2006.
He is now calling for policies which he believes would make Britain substantially more attractive to entrepreneurs and investors.
Among his proposals is the return of a 10 per cent capital gains tax rate for entrepreneurs who have spent 20 years building businesses organically.
Current capital gains tax rates are 18 per cent for basic-rate taxpayers and 24 per cent for those paying the higher rate.
Not all of Mr Caudwell’s tax proposals involve reductions. He has also argued in favour of increasing fuel duty, telling The Telegraph that normal movements in petrol prices meant motorists could absorb an increase of around 10p.
He has also questioned whether some of the measures introduced by Prime Minister Andy Burnham are sufficiently ambitious to address Britain’s economic problems.
Discussing policies including the £2 bus fare cap and the removal of VAT from electricity bills, Mr Caudwell acknowledged that he did not necessarily oppose such measures, but argued that the Government needed to concentrate on the much larger challenge of generating investment and growth.
His criticism comes amid wider concern from sections of the business community about taxation and the cost of employing workers.
Mr Caudwell is among more than 100 business leaders and MPs who have backed a campaign calling for lower taxes.
The group also includes former Marks & Spencer chairman Lord Rose of Monewden and Pimlico Plumbers founder Charlie Mullins.
In a letter to the Government, campaigners have criticised changes to National Insurance, capital gains tax and business reliefs, describing their cumulative impact on companies as a “death by a thousand cuts”.
Lord Rose has also warned that higher National Insurance costs and new employment regulations are making it more expensive for businesses to employ people.
Mr Caudwell has not yet formally returned his support to the Conservatives, and his comments make clear that he still wants to see changes from Mrs Badenoch.
Nevertheless, the intervention from a businessman who publicly backed Labour at the last general election represents an important change of tone.
Having placed his faith in Labour’s promises of growth and a business-friendly government in 2024, Mr Caudwell now says the Conservatives are once again the party he considers capable of being elected.
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