Small businesses could benefit from a cut in business rates, shadow chancellor Ed Balls has promised, if Labour are elected on May 7.
The party has set out plans to reverse a cut in corporation tax, and said a Labour government would ‘turn to the richest’ to pay down the deficit.
It could mean that the hundreds of small businesses that signed up to The Star’s business rates campaign see a benefit.
But Prime Minister David Cameron has challenged Labour to spell out the exact details of its plans, and warned voters the party would ‘pick your pocket’.
Mr Balls argued that his party’s plans would not involve raising VAT to pay for the business rates cut. He said: “Unleashing the potential of smaller businesses to grow, create more good jobs and raise living standards is a vital part of Labour’s plan.
“This is part of our plan to deliver a simpler and fairer tax system for small businesses. This is the right priority when money is tight.”
But the plan was described as ‘crazy’ by David Cameron, while Conservative Treasury minister David Gauke said: “This would be the first time corporation tax has risen in over 40 years and Labour’s plans could cost 96,400 jobs – it would put people’s economic security at risk.”
Paul Raynes, who is director of policy at manufacturers’ organisation EEF, said: “Business rates are an unwelcome and unavoidable cost.
“Many small manufacturers occupy big sites and so pay big rates bills, and will want to know that Labour’s definition of small businesses applies to them, too.
“Businesses will also want reassurance business rates relief isn’t simply going to be paid for by redistributing their tax burden.”