UK Labour party sets out plans to support high street firms by taxing online giants

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The tax system is “stacked” against high street firms, Labour has warned as it set out plans to shift the burden to online giants like Amazon.

Shadow chancellor Rachel Reeves said she would freeze business rates next year if she was in No 11, while also offering a cut for small firms, paid for by hiking digital taxes.

She committed the next Labour government to abolishing business rates, using the proceeds of a global deal on taxing multinational firms.

(PA Graphics)
(PA Graphics)

The move comes as Labour seeks to get its conference in Brighton back on track following internal rows over party rules, criticism of Sir Keir Starmer after he ruled out nationalising energy giants and the fallout from Angela Rayner’s attack on the “scum” in Boris Johnson’s Cabinet.

Ms Reeves said: “I want taxes to be fair, efficient and I want them to support our high street businesses. We have got a situation at the moment where, in the first six months of this year, every single day 50 high street businesses were closing.

“Four out of five businesses are saying that if the Government goes ahead with its business rates increase next spring then they will have to consider closing outlets.

“This is not a place that we want to be, people want thriving high streets in all of our communities.

“But at the moment the tax system is stacked against high street businesses and small businesses.”

Labour Party Conference 2021
Labour Party leader Sir Keir Starmer and shadow chancellor Rachel Reeves (Stefan Rousseau/PA)

The freeze in business rates in 2022/23, and an increase in the threshold for small business relief from £15,000 to £25,000, would be funded by increasing the digital services tax from 2% to 12%.

Insisting that Labour could be trusted with the public finances, Ms Reeves told BBC Radio 4’s Today programme: “I have set out clear fiscal rules, that we will pay for day-to-day spending with tax receipts and that we will get our debt falling as a share of our national income.

“I will not make a commitment I can’t keep, I will not make promises that I cannot keep.”

She insisted there was no rift with her party leader over tax policy after Sir Keir said “nothing is off the table” when asked about income tax rises.

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