Labour leader Ed Miliband sets out plans to give struggling firms a tax break

Small and medium-sized businesses in Newcastle could enjoy a cut in business rates of more than £500 a year under a Labour Government

Labour leader Ed Miliband
Labour leader Ed Miliband

Small and medium-sized businesses in Newcastle could enjoy a cut in business rates of more than £500 a year under a Labour Government, Ed Miliband has revealed.

The Labour leader set out plans to give struggling firms a tax break as he spoke to regional newspapers including The Journal at Westminster.

He said the move was part of his plans to change Britain’s economy so ordinary working people got a fairer deal.

But big businesses would face higher taxes to help pay for the reforms.

Under Labour’s proposals, business rates would be cut for any businesses in a property with an annual rental value of less than £50,000.

This would help 1.7 million firms across the country, including many shops and pubs. Labour’s first Budget after a general election in 2015 would ensure that business received a refund on their 2015 rates, taking them back to the level they paid in 2014.

And then business rates would be frozen for 12 months, saving employers from another rise.

At the moment, the increase in business rates is set every year by the Treasury and is based on inflation.

This year, business rates across the North East rose by an average of £360, which means firms would receive a rebate of £360 if the policy was introduced today.

Business rates in Newcastle rose by £520, while rates in Northumberland rose by £210.

The increase in Durham was £260, in Gateshead it was £430, in North Tyneside it was £380 and in Sunderland it was £380.

However, larger firms will pay more - with Labour reversing Coalition plans to cut the main rate of business tax, paid on profits above £1.5m, from 21% to 20%.

Mr Miliband said: “Small businesses are the lifeblood of communities right across the country. Business rates keep going up and up. They are due to increase on average £430 this year.

“But David Cameron’s government stands up for big businesses and ignores the needs of small business.

“We are releasing figures today which show the impact in the North East.”

Ministers insisted they were already backing smaller businesses. High Streets Minister Brandon Lewis said: “This Government is supporting business and entrepreneurs.

“Corporation tax is set to become the lowest in the G20; a new Employment Allowance will mean 450,000 small businesses no longer have to pay NI contributions and because all business rates remain linked to inflation there has been no real terms increase in bills for over 20 years.”

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