Business rates are driving many businesses under – we need a cut

In business, as with everything else, David Cameron’s Government stands up for the privileged few, while everyone else is left to fend for themselves. While the Tories are cutting taxes for multinationals and large companies, small businesses are not getting the help that they desperately need in order to stay afloat.

In my own constituency of Feltham and Heston, small businesses which their owners rely on for their family income tell me how they still struggle to get credit, and how people still just aren’t spending locally like they used to. Combined with this, the cost of running a a community business means that even where sales pick up, profits remain low.

Nothing illustrates this more than what has been happening with business rates. Just as families’ living standards have been hit by the cost of living crisis, so have the fortunes of Britain’s small businesses. High inflation has fuelled a rise in business rates of nearly £2,000 this Parliament. More than one in ten small businesses now say they spend the same or more on business rates than they do on rent.

This is driving many businesses under, especially in the retail sector, where there are now 40,000 empty shops in the UK.

What is the Government doing to help these businesses and to bring our high streets back from the brink of extinction?  Next  to nothing. Instead, it is lavishing £10 billion in tax cuts on the corporations and multinationals that already had the deepest pockets to begin with. This Government has the wrong priorities and stands up for the wrong people.

What we need is a One Nation approach to the problems of Britain’s businesses, not one that privileges an elite group of multi-nationals and Tory-donating companies. If elected, Labour would shelve that tax cut in order to fund a cut in business rates for small businesses in 2015 and then freeze them in 2016. The cut would benefit properties with an annual rental value of below £50,000. This would mean a saving of nearly £450 for 1.5 million properties.

In contrast, Tory plans to cut Corporation Tax from 21% to 20% would have benefited 80,000 businesses, in other words, just 2% of British businesses.

Shelving this tax cut would not damage the competitiveness of the UK’s corporation tax regime. Our Corporation Tax rate is among the lowest in the G20 and large companies and multinationals have already benefitted from  a £10 billion tax cut this Parliament.

The Government’s desire to cut it further reflects its desire to engage the UK is a race to the bottom from which only the richest will benefit.

It is now time for the small businesses, which are the engine of our economy and the lifeblood of our local town centres, to be on the receiving end of Government goodwill. That is why Labour is also proposing a British Investment Bank to boost lending to small businesses and a raft of other measures to provide businesses with support and training.

The cost of living crisis is weighing down on small businesses struggling to the pay the rent, as much as it is on young people looking to buy their first home and families hit by rocketing childcare costs. Labour under Ed Miliband has shown it is the only party committed to easing the pressure on them.

We want to see  recovery that benefits everyone not just a privileged few. It’s a one nation approach that is going to make the difference we need to men and women setting up small businesses, so they have the chance not only to survive, but to thrive.

Seema Malhotra is the Labour MP for Feltham and Heston