Labour Leader Ed Miliband vows to cut business rates
The Labour leader used a visit to the Jaguar Land Rover engine plant in Wolverhampton to outline a plan for the economy, promising an apprenticeship for every school leaver who gets good grades and a cut in business rates.
Mr Miliband said the plan would not hit council budgets because the discount would come from the central government.
“It is a different choice that we’ve made,” he said. “The Tories say cut the corporation tax. We say business rates. It’s hundreds of pounds on average, a significant amount. It depends on the size of the business. If you are a larger business with larger premises it will be a cut, then a freeze.
“We’ve said councils will be able to keep 100 per cent of the uplift in their business rates. If they get more business in, they will be able to keep the business rates. That’s an important incentive. But the cut in business rates is funded by us. We’re not expecting the councils to fund it.”
Mr Miliband also said he would plough ahead with devolution of powers for the West Midlands, including to a combined authority for Birmingham and the Black Country.
But he was adamant that Birmingham would not swallow up the four boroughs.
Miliband’s business rates plan offers accidental boost to big businesses.
Labour said on Monday that it would cut business rates for properties with a rateable value of below £50,000. But according to research by property consultant Daniel Watney, this would also cut rates bills for more than 100 Boots shops as well as more than 5,000 banks, including the embattled HSBC, despite Milliband’s pledge to not offer tax breaks for major corporates.
Milliband stressed that Labour’s first priority was “not further cuts for large businesses”. Labour’s report said it “will instead cut and then freeze rates for small and medium-sized firms… a cut in business rates will mean an average saving of over £400 on 1.5 million properties”.
In an embarrassing blow to Milliband, his advisers appear to have failed to notice that a number of large companies occupy buildings with a rateable value which would fall into this threshold.
According to Debbie Warwick, head of business rates at Daniel Watney, rate payers would need to register themselves as a ‘small business’ in order to distinguish themselves from corporates and independents. This would create needless extra bureaucracy for companies and a massive headache for the council billing authorities, she said.