Labour leader Ed Miliband is to attack the coalition for building a tax system which benefits banks at the expense of other sectors, promotes short-termism and dissuades investment in company infrastructure.
Deputy Prime Minister Nick Clegg today announced the 492 firms who have been successful in bids for money from the regional growth fund, worth £950m. It is part of an effort to show the Government is working to re-balance the economy away from financial services.
But, during a visit to Manthorpe Engineering in Derby today, Miliband will say reductions in capital allowances on company infrastructure spending to fund corporation tax cuts are one example of how Government policy promotes short-termism.
According to the Press Association, analysis commissioned by the House of Commons library shows banks will be among the biggest winners while manufacturing, high-end engineering companies and the self employed will lose out.
Miliband says: “We must end the fast buck, something for nothing culture so that we can build a new economy that serves the interest of British business, of most people, of the next generation and our nation as a whole.”
The Commons Library research suggests that up to 200,000 businesses will face higher tax bills with some firms facing increases of as much as £30,000.
From April 2012, the annual investment allowance will be cut from £100,000 to £25,000. Corporation Tax was cut from 28 to 26 per cent in April this year, with further cuts of 1 per cent planned for each of the next three years. On the eve of its annual conference in September, Labour announced it would reverse the Corporation Tax cut for financial services firms to help fund capping tuition fees at £6,000 a year.
The National Association of Pension Funds and the Department of Business Innovation and Skills have commissioned Professor John Kay to investigate corporate short-termism and its impact on pensions funds.