abour proposed a package of “emergency” measures – including an immediate tax cut – to help ease the burden of rising costs on businesses.
The party says that under its plans a typical small factory or workshop would save £2,700, a pub would be better off by £2,600 and the average cafe or restaurant would benefit to the tune of £2,700.
In the long term, Labor has said it will scrap corporate rates and replace them with a system that supports “growth”, which it says will be “fairer between brick-based small street businesses and global click-based tech giants”.
The party’s initial proposals are a small business tax cut, which Labor says could come into effect this week if passed by the government; an energy support fund; a “green steel” fund; and the removal of the planned National Insurance hike.
Jonathan Reynolds, the shadow business secretary, said companies facing “a tidal wave of additional costs” are being “held back” under the Tories.
“Action must be taken now to ensure that businesses remain viable and that additional costs are not passed on to consumers, worsening the cost of living crisis,” he said.
“Under Labour, small businesses would earn around £2,000 from this week through our tax cut plans and we wouldn’t penalize small businesses for expanding. Labor would support the industry with our energy support fund and our long-term plans to green the steel industry.
“It is clear that big business in Britain cannot afford this government.”
The party said its analysis shows the current corporate tax rate system “acts like a tax on growth, with small businesses facing large tax cliffs if they grow.”
“A typical hairdresser moving from one to two locations would see their tax bill rise from £0 to £5,000, while an average shop would rise from £0 to £10,000,” he said.
Under Labour, small businesses would earn around £2,000 from this week thanks to our tax cut plans
Labour’s emergency package would include raising the threshold for small business rate relief for one year, from £15,000 to £25,000, from April 1.
Meanwhile, the party’s energy support fund would prioritize energy-intensive industries such as steel, glass and ceramics.
“At least 388,000 jobs are at risk if these factories are forced to close or reduce operations because the price of gas has almost tripled since last October,” he warned.
The ‘green steel’ fund would ‘support the steel industry to decarbonise’, the party said, with an investment of £3billion in conjunction with business over the next decade.
The final part of the package would be to scrap the government’s planned increase in national insurance contributions.
The Treasury and the Department for Business, Energy and Industrial Strategy have been contacted for comment.