Election '97: Major talks big to small businesses

John Major yesterday announced a package of special aid for small businesses, including rates relief for about 750,000 shops and small companies.

Launching the Conservative small-business manifesto in Birmingham, Mr Major said: "The most outstanding of all Britain's business success stories is that of our small businesses. Whereas Labour made big business small, we've helped small businesses grow big."

The key measure in the manifesto was a "fairer" rating system, with the Prime Minister promising that if re-elected, he would introduce a new rates allowance scheme, "under which businesses will pay no rates at all on the first pounds 1,000 of the rateable value of their premises".

"Over three-quarters of a million small businesses will benefit," he said. "That's 90 per cent of small firms with turnovers below pounds 100,000 - 140,000 will pay no rates at all."

Ian Lang, President of the Board of Trade, said: "We'll finance this by making a small increase of 2.5 pence in the overall business rate package."

The move will save small companies around pounds 430 a year in business rates, according to the Federation of Small Businesses. But a Downing Street source said: "It is not a Robin Hood measure. The uniform business rate is already tilted against small businesses. This redresses the balance."

Mr Lang said other measures to be taken by a new Conservative government would include a streamlining of industrial tribunals and further simplification of the administration of pay as you earn (PAYE) tax and national insurance contributions for small companies.

Attacking Labour, Mr Major said: "How can you take seriously a party that claims to be interested in the future of small businesses, but has proposed to put burden after burden on small firms?

"How can you take seriously a party that proposes to sign the European Social Chapter ... with all the costs on small businesses that implies?

"How can you take seriously a party that boasts it is going to introduce a minimum wage, but having done so for a long time cannot ... tell us what the level of that minimum wage will be?"

Mr Major told the press conference it was no use pretending that a minimum wage would not cost jobs or that wages would not rise. "What they have to offer small businesses is more regulation, more job losses, more tax, more control, higher uniform business rates and nothing but contraction of one of the most successful parts of the UK economy," he said.

But Labour's employment spokesman, Ian McCartney, said the Tory initiative was "the most desperate performance yet from a government that is out of ideas and is now running out of time".

Earlier, Gordon Brown, shadow Chancellor, told an election press conference in London that the party had received a series of personal endorsements from business leaders for its plans for a pounds 60 tax rebate for employers who took on young people under the party's "new deal programme".

"And we can announce that we have reached agreement with the Building Employers Confederation, who say they can co-operate with Labour to provide work and training for 10,000 young unemployed people."

Labour's list of "personal endorsements" included David Waterstone, chairman of Ansaldo International; Bryan Sanderson, executive director of British Petroleum; Swarj Paul, chairman of Caparo Group; Christopher Haskins, chairman of Northern Foods; Paul Hamlyn, of Hamlyn Publishing; and Nick Scheele, chairman and chief executive of Jaguar Cars.

Mr Scheele said later that he had not specifically endorsed the idea of the pounds 60 rebate, although he told BBC Radio 4's World at One programme: "I have certainly endorsed the fact that we need to focus on the issue and I am comfortable with doing that. But whether this scheme is better than any other I really don't know."

However, in a later statement, Mr Scheele added: "I believe that youth unemployment is one of the major problems facing our country and I support, in principle, proposals such as a pounds 60-a-week rebate to employers who take on young unemployed people are part of the vital measures necessary to tackle this problem."