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Labor promises to ‘close the shutters’ on small businesses
Image source, Getty Images
June 7, 2024
Updated June 8, 2024
Labor has promised to overhaul the business rates system to help revitalize the High Street if elected at the UK general election.
The party did not specify what would replace the current business rates system, but said the reforms would level the playing field for high street businesses against online rivals.
The party first presented a plan outlining how it wants to support British small businesses back in November.
Labor leader Sir Keir Starmer said “hardworking small businesses have been held back”.
Business rates are a tax on non-residential properties such as pubs, restaurants, warehouses, factories, shops and offices.
The amount businesses pay is based on how much annual rent could be charged at the location – which is known as the rateable value.
Central government has a significant degree of control over business rates in England, but they are collected by local councils.
On Saturday, shadow chancellor Rachel Reeves told the BBC that the Labor Party “wants to reform the business rates system in a way that reduces costs for small businesses and the high street, ensuring that some of the big multinationals and technology companies pay their fair share.”
The party would also create “banking hubs” to ensure small businesses and shoppers have ready access to cash when they are on the High Street, Reeves said.
As part of a package of measures, the Labor Party says it would end late payment of bills through new legislation to force big businesses to reveal their payment practices, as well as revitalizing high streets by cracking down on behavior anti social.
The Labor Party is also planning new laws to allow smaller businesses to qualify for public contracts.
It seeks to claim the mantle of the business party, traditionally associated with the conservatives.
Reeves was joined on the campaign by retail guru Mary Portas, who switched to the Labor Party after advising David Cameron’s Coalition government on how to revive the High Streets in 2010.
Ms Portas said high streets were vital to “communities and their wellbeing”.
She described small businesses as “the backbone of our economy” which were “terribly left behind” during the Covid-19 pandemic as shopping habits shifted online.
Ms Portas also welcomed plans to crack down on late payments as “cash flow is vital” for independent businesses.
Tina McKenzie, policy chair at the FSB, said it was “good to see the payment arrears resolved by Labour” and that eyes would now “turn to the launch of its manifesto to see if the party takes a pro-small business approach”. .
Speaking ahead of a small business themed event held by the Labor Party on Saturday, Sir Keir said business owners faced economic instability due to “Tory chaos”.
However, Business Minister Kevin Hollinrake said that “Rishi Sunak and the Conservatives have a track record of taking bold action to support small businesses.”
He pointed to previous measures taken by the government, such as freezing business rates for hospitality venues during the pandemic, when trade was hit by lockdowns.
Drew Hendry, the SNP’s economic spokesman, suggested Labour’s plans were “empty promises” for Scottish small business owners.
He added that the SNP had already created the Scottish National Investment Bank, but called for the elimination of “red tape, higher costs and work visa blocks created by Brexit”.
Meanwhile, a Liberal Democrat spokesman said the Conservative Party had “completely let business owners down time and time again” and would also consider an “overhaul” of the business rates system.