Labour 'to offer rate cut for small businesses'

Labour 'to offer rate cut for small businesses'

Labour leader Ed Miliband is expected to promise that Labour would reverse a plan to raise business rates for small businesses, in a keynote speech to be delivered at the Labour Party Conference today (24th September).

Miliband is said to be preparing to pledge to help 1.5 million small businesses in England by reversing business rates back to 2014 levels in May 2015, and then freezing them altogether in 2016.

The move would apply automatically only to businesses in England, but money would be given to the devolved governments in Wales, Scotland and Northern Ireland so they could follow suit.

Miliband expects the policy would save small businesses, such as pubs, shops and hi-tech start-ups, an average of nearly £450 over two years, with some firms saving £2,000, according to BBC News.

The Labour leader is expected to say it would pay for this by reversing a planned cut in corporation tax from 21% to 20%. If the corporation tax cut raised more money than expected, any cash left over would be used to cut business rates further.

The British Retail Consortium launched a campaign calling for business rates to be frozen last year and the Booksellers Association called on its members to sign a petition demanding a rate reduction. At the time, Time Godfray, c.e.o. of the Booksellers Association, said: “The BA remains committed to lobbying for a freeze on business rates.”

The BRC has expressed its early support for the prospective Labour policy on freezing business rates and has said that a “complete reform of the system” was required. Its director, Helen Dickinson, said: “The UK business rates are the highest property taxes of any EU country and lead directly to vacant shops. A consensus is emerging that the system is no longer fit for purpose and requires total reform.
 
"We therefore welcome this focus on supporting small businesses and high streets and the recognition that the cost of business rates has become unsustainable for retailers. With more than one in ten shops currently empty across the country, a complete reform of the system is required. We are keen to discuss these proposals in detail with Labour to understand how they might form part of this more fundamental root and branch review."