Ed Miliband vows to create an 800 million tax break for small companies by cutting their business rates

Small businesses are to be offered a tax break to the tune of 800 million if Labour wins the next election.

The move would be paid for by scrapping the coalition Government's planned 2015 cut in corporation tax from 21% to 20%.

Ed Miliband is keen to make Labour "the small party business" - a topic which he will address during his keynote speech at the party's annual conference in Brighton

It is estimated that the help would be worth an average 450 over two years to 1.5 million businesses, including shops, pubs and hi-tech start-ups, and up to 2,000 for some companies.

Borrowing a slogan from Ronald Reagan's successful 1980 bid for the US presidency, Mr Miliband will say that in 2015 voters should ask themselves: "Am I better off now than I was five years ago?"

He will also declare that he wants growth in the UK economy to benefit "hard-working families", including small business owners, and not just the "privileged few".

Business rates are due to rise in April 2015. If Labour came to power in May 2015, however, its first act would be to reverse that rise for small firms and freeze the levy the following year.

The move would apply automatically only to businesses in England, but money would be given to the devolved governments in Wales, Scotland and Northern Ireland so they could follow suit if they so wished.

A Labour Government would also increase the corporation tax that bigger firms pay on their profits. This shift in taxation would cost bigger businesses almost 800 million a year, all of which would be passed to small companies in the form of lower business rates.

While Prime Minister David Cameron and Chancellor George Osborne have been "boasting" of fixing the economy, Mr Miliband will say that the proceeds from growth have gone to a minority.

He will claim that life for ordinary families has been getting harder, thanks to a "cost of living crisis" caused by soaring bills and wages which fail to keep pace with inflation.

Copyright Press Association 2013