In the U.K. the opposition party appoints a person to “shadow” the person in office thus learning the job and able to speak intelligently about alternative policies. Following the speeches of Shadow Chancellor Ed Balls and Party Leader Ed Miliband, we now know more about how Labour plans to treat business. So if the Labour party wins the 2015 general election, would they help U.K. business or hinder it?
The £400 Tax Break
One of Labour’s priorities this election will be to empower small businesses which have premises leases of a value of £50,000 or less. Miliband has vowed that if Labour wins the election, they will give these companies a tax break which will save them £450 on average over 2 years. This policy is likely to have a far reach, as labour has suggested it is likely to affect around 1.5 million small businesses across the UK, so there’s potential for a large amount of money to be saved. The policy has, however, led some commentators to ask how the tax break will be paid for and how much good £225 a year will do.
Reversal of the Big Business Tax Cut
According to Shadow Chancellor Ed Balls, the money will come from a reversal of the plans by Chancellor George Osborne to cut corporation tax paid by the 80,000 largest businesses in the UK from 21% to 20% in 2015. As Miliband has said, the tax cut for small businesses will help promote “the vibrant, dynamic businesses that will create wealth in Britain”.
Therefore, it seems as though labour is coming down on the side of small businesses while the Conservatives support the largest ones, and therefore the size and scope of your business really dictate whether Labour will be on your side come election time.
Labour and Conservative Differences
Historically, the Labour party has been influenced by Keynesian economics, the party favoured government intervention in the economy, and the redistribution of wealth. Although founded on Socialist principles, the party electoral manifestos have not contained the term socialism since 1992. The new version of Clause IV, although still affirming a commitment to democratic socialism, no longer mention the public ownership of industry: In its place, it advocates “the enterprise of the market and the rigour of competition” with “high-quality public services” not necessarily themselves in the public sector.
The Labour party was founded by the unions to represent the interests of working-class people, Labour’s link with the unions has always been a defining characteristic of the party. In recent years, however, this link has come under increasing strain, with the RMT being expelled from the party in 2004 for allowing its branches in Scotland to affiliate to the left-wing Scottish Socialist Party. Other unions have also faced calls from members to reduce financial support for the Party and seek more effective political representation for their views on privatisation, public spending cuts and the anti-trade union laws. Unison and GMB have both threatened to withdraw funding from constituency MPs and Dave Prentis of UNISON has warned that the union will write “no more blank cheques” and is dissatisfied with “feeding the hand that bites us”. So it appears the differences between Labour and Conservatives are decreasing.
See Also:
- Rising Socialism Around the World
- Government Trend- Toward Fascism Part 1
- Government Trend– Toward Fascism Part 2
- Comparing Keynesian and Austrian Economics
- Unintended Consequences of Well-Intended Policies
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