Labour will put the region's small businesses first in line for tax cuts and ensure the tax burden on small firms is lower than under the Tories, Ed Balls announced today.
The move, which will be in Labour's first budget, will benefit 94,000 small business properties across the North East & Cumbria who will see their business rates cut and then frozen for the following year.
Ed Balls will also publish Labour’s plan to deliver a fairer and simpler tax system for small firms. This is part of Labour’s Better Plan for Small Businesses, which includes action to tackle late payment, reducing unnecessary regulation and establishing a British Investment Bank to boost lending to small firms.
Over the course of this Parliament the Conservative-led Government is set to have spent more than £7 billion cutting the main rate of corporation tax to the benefit of large companies. But new figures published by Labour today show that since 2010 revenue from business rates has gone up by almost £3 billion and that higher business rates have cost firms an average of £1,500 a year.
Labour will lower the tax burden on small businesses with a cut in business rates – worth an average of £400 – rather than going ahead with another cut in corporation tax for large firms.
This will benefit 17 small business proprieties for every one business helped by a further cut in corporation tax. And we will look to go even further as we prioritise small businesses for future tax cuts.
Ed Balls, Labour’s Shadow Chancellor, said:
“Unleashing the potential of smaller businesses to grow, create more good jobs and raise living standards is a vital part of Labour’s better plan. Because when working people and British businesses succeed Britain succeeds too.
“That’s why Labour’s first Budget will back Britain’s small firms and our struggling high streets by cutting business rates. And we will look to go further by putting small businesses first in line for future tax cuts. This is part of our plan to deliver a simpler and fairer tax system for small businesses.
“Under the Tories higher business rates have cost firms an average of £1500 a year and are an ever bigger part of their tax burden. So instead of another corporation tax cut for large companies which helps fewer than one in ten firms, we will cut and then freeze business rates for small firms instead. This is the right priority when money is tight. And it will mean that the tax burden on small businesses will be lower with Labour than under the Tories.
“As well as cutting business rates our plan will also tackle late payments, reduce unnecessary regulation and boost lending to SMEs who want to grow with a proper British Investment Bank.
“Every large business started off as a small business and I want to ensure smaller firms have the support they need to grow, invest, innovate and raise their productivity. Our plan will help small firms create more high skilled, high paid jobs which are vital to raising living standards.”