Labour leader Ed Miliband is to unveil plans to freeze business rates for small firms. However, his proposals have been been criticised as “tinkering at the edges”.
Miliband is expected to tell supporters that if the Labour Government came to power in May 2015 it would first drop rates back to 2014 levels and then freeze business rates until 2016.
But the move would only target businesses with rental properties of £50,000 or less, impacting 1.5 million small businesses. It is expected to save small businesses, such as pubs, shops and hi-tech start-ups, an average of almost £450 over two years, and some firms would save £2,000.
The party says it would pay for this shortfall in revenue by reversing a planned cut in corporation tax from 21% to 20%, which is due to come into force in April 2015, according to BBC News.
Miliband is set to reveal the plans today at his keynote speech at the party conference being held in Brighton.
But the Conservatives said it was “yet more economic incompetence from the same Labour politicians who got us into this mess”. Meanwhile, the Institute of Directors said Miliband was “tinkering at the edges”, as the changes will only impact very small businesses.
Onerous business rates are the biggest gripe for all retailers, which have had to rein in investment after rate bills have rocketed by more than £500m over the past three years.
Miliband’s business rates pledge will come as he vows to take action over Britain’s “cost of living crisis”.
He is set to say: “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 the privileged few, including those big bonuses, 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 yachts.”
British Retail Consortium director general Helen Dickinson said: “We 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.”
Former Wickes boss Bill Grimsey, who revealed his ‘alternative’ report to revive high streets last month, said: “Cutting business rates and freezing them for another year for small businesses is a big step forward.
“This is what we’ve been crying out for, serious high street policy. No gimmicks, no reality TV, just solid policy. This is what small businesses are after, and this is what the high street needs.”