In a bid to position Labour as “the party of small business”, Ed Miliband will today offer an £800m tax break to smaller companies .
At the Labour Party Conference in Brighton, Miliband will say that should his party win the next election, it will reverse a hike in small business rates due in April 2015 and freeze the levy the following year.
The move is expected to help 1.5 million small businesses, including shops, pubs and tech start-ups, save an average £450 over two years. The tax break would be paid by reversing the coalition’s planned 2015 corporation tax cut for firms from 21% to 20%.
Miliband will kick off his keynote speech using Ronald Reagan’s slogan from his 1980 bid for the US presidency and will ask voters to ask themselves: “Am I better off now than I was five years ago?”
“Too many of the jobs we’re creating in this country are just too low-paid, too many of the gains in our economy are just scooped up by a privileged few, including those with big bonuses,” he will say. “And too often you are left being charged over the odds.
“They used to say ‘a rising tide lifts all boats’. Now the rising tide just seems to lift the yachts.”
He will say that 80,000 big businesses have already seen £6bn reduced in corporation tax under the coalition Government. Also, 1.5 million small firms will have seen their business rates rise by an average of almost £2,000 by the end of this Parliament.
Speaking about tax breaks on small firms, Miliband will say: “Most of the jobs of the future are going to be created in a large number of small businesses, not a small number of large businesses. And most of the new jobs that British people will be doing in 15 years time will be in new companies.
“That’s why we have to support our small businesses, the vibrant, dynamic businesses that will create wealth in Britain.”
Miliband will also accuse the Tories of pursuing a “race to the bottom” while Labour would offer a “a race to the top”.
“You’ve made the sacrifices. But you’ve not got the rewards. You were the first one into the recession, but you are the last one out.
“Will the pain be worth it for the gain under this Government? No.
“They aren’t going to solve the cost of living crisis. Because for them, it is not an accident of their economic policy, it is their economic policy.
“David Cameron talks about Britain being in a ‘global race’. But what he doesn’t tell you is that he thinks the only way Britain can win is for you to lose.
“For the lowest wages, the worst terms and conditions and the fewest rights at work – a race to the bottom. The only way we can win is a race to the top.”
Commenting on Labour recommendations to overhaul the business rates system Sue Terpilowski, london policy chairman, Federation of Small Businesses, said:
“We know that many firms in London are struggling to pay business rates and FSB research suggests seven per cent of members pay more in rates than rent. That’s why we’ve also been calling for a freeze in business rates since many small firms in London are keen to grow and expand but high business rates are holding them back, so the announcement today is a step in the right direction.”
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