Details and industry reaction to Labour’s business manifesto

Robert Oxley, campaign director of Business for Britain, said:

“Labour’s attempts to portray opposition to an EU referendum as pro-business is as misguided as it is cynical. Just like voters, business leaders back a referendum as it’s the best way to secure meaningful change to our relationship with the EU. 

“Sticking with the status quo while only paying lip service to ‘reform’ is guaranteed to harm Britain’s prosperity and business competitiveness. Many of the same arguments used against a referendum today were deployed a decade ago to try and railroad Britain into joining the euro. They were wrong then and they are wrong now.”

George Bull, senior tax partner at Baker Tilly said:

‘The publication of Labour’s business manifesto confirms beyond doubt that the party intends to reverse the cut to the top rate of income tax, which would see rates for those earning £150,000 or more a year rise from 45 per cent to 50 per cent. 

‘In a separate but related announcement on business funding, Miliband has also signalled the party’s intention to encourage businesses to reduce their reliance on debt funding by making equity funding more attractive. This is likely to involve a system of tax reliefs known as allowances for corporate equity or ACE, which provide incentives for businesses to invest in shares. There is a precedent for this in Belgium which operates such a scheme, but the impact of such a measure could be a reduction in corporation tax yields, which could conceivably be offset by a corporation tax rate increase.”

Simon Walker, director general of the Institute of Directors, said:

“Business leaders will welcome Ed Miliband’s focus on strengthening the UK’s position as an open and outward-looking country, and share his desire for continuing membership of the European Union. However, there is little desire in the business community for maintaining the status quo.

“Only around one in ten IoD members think the EU social and economic model is working, and significant reform is needed to boost the private sector across the continent. While our members would not vote to leave, they think it is sensible to hold a referendum based on reforms, which the UK can achieve if it works with European partners.

“Labour’s policy on Europe may not be the trump card Miliband supposes it is. There are plenty of other important issues that will be in the minds of businesses in the run-up to the election. Labour must make sure that warm words are backed up by practical policies. Businesses will support their commitment to remove international students from arbitrary net migration targets, for example.”

John Longworth, director general at the British Chambers of Commerce said:

“The Labour business manifesto sets out a number of sound policies, notably around long-term investment, access to finance, infrastructure and training – all of which are critical to the sort of sustainable, balanced growth that the UK economy needs.

“At the same time, some of the tax and regulatory plans proposed by Labour need a re-think – to ensure these do not negatively affect enterprise and entrepreneurial aspiration.

“The proof of success will be in the delivery and impact of these policy proposals – that is how we will measure any incoming government.”

Terry Scuoler, chief executive of EEF, said:

“Manufacturing businesses want us to remain the EU. They want a wholehearted commitment to punch above our weight in Europe whilst, at the same time, leading the push for the vital reforms we need to make the Commission fit for purpose. Miliband’s comments are therefore welcome.

“This is not the sole factor that drives growth, however, and industry will want to be reassured that Labour will deliver on crucial investments in our infrastructure and skills whilst creating as competitive and business-friendly environment as possible.”

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