Miliband plans boost for small businesses

Ed Miliband will on Monday commit his party to helping Britain’s small businesses as he outlines an industrial strategy linking “bigger profits” in the economy with the individual prosperity of entrepreneurs.

In a speech to executives at Jaguar Land Rover in Birmingham, the Labour leader will attempt to show that he has a credible plan for the UK economy after rising concern among business leaders about the party’s shift to the left. Mr Miliband will explain that his party’s plan for creating wealth does not rely on “just a few at the very top”, but on boosting productivity in “every business and sector”.

He will also make clear that industrial success is about sectors such as social care and retail as well as the larger exporters, as he sets out plans to boost vocational training and apprenticeships.

While Labour has already pledged to cut and then freeze business rates for 1.5m small business properties with a rateable value of less than £50,000, party officials hinted that they would go further in future by putting such enterprises “first in line for tax cuts”. Officials also stressed smaller companies would be given the “support they need” to “invest, innovate and raise their productivity”.

Business rates costing jobs, says Heathrow boss

Britain’s business rates system is “punishing investment” and will cost jobs and growth unless it is reformed, according to the chief executive of Heathrow Airport.

John Holland-Kaye said Europe’s busiest airport, which has the highest business rates bill in England, was forced with an unfair and “disproportionate” bill that was so large that it was beginning t affect investment decisions.

“We’re being punished for investing. We’ve created and supported 35,000 jobs while we were building [Terminal 2] and yet we have this huge tax bill on the back of it that’s completely unrelated to passenger volumes,” he said.

“That doesn’t seem fair and it disincentives significant investment like ours which has a huge benefit on jobs that have been created while we’re investing.”

Mr Holland-Kaye said Heathrow, which is in a battle with Gatwick over the right to build Britain’s next runway, paid about £168m a year in business rates. “All of us benefit from the 11bn of private money that we’ve put into the airport, but we’re paying a significantly higher level of tax as a result.”

Leading business figures and lobby groups, including the confederation of British Industry (CBI), have said the current system, which is based on the rental value of properties, disadvantages companies with a large high-street presence and discourages investment.

Five years ago, Heathrow’s business rates bill was £93.4m, according to calculations by Paul Turner-Mitchell, a business rates expert and campaigner.

Asked if the jump in Heathrow’s business rates bill would deter investment, Mr Holland-Kaye said: “It’ become a much bigger part of our tax bill, so yes it does tie into our investment business case”.

By comparison, Mr Tuner-Mitcehll’s calculations, which are based on figures from the Government’s Valuation Office Agency, show Gatwick’s business rates bill will amount to almost £30m this year.

Mr Holland-Kaye called for an overhaul of the system that linked rates to revenues.

Posted on: 17/02/2015