Business rate cap branded 'absolutely pathetic'

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Labour has branded the government's proposal to cap business rate increases in England and Wales at 2% "absolutely pathetic".

Shadow business minister Toby Perkins said it was a "hollow gesture" that would do little to ease the burden on small businesses, and accused ministers of being "out of touch".

He pledged that a future Labour government would cut business rate relief by an average of £410 a year for 1.5 million small businesses, followed by a rate freeze the following year.

Chancellor George Osborne is expected to announce the 2% cap during his autumn statement to the Commons on Thursday.

Communities Minister Brandon Lewis accused Labour of trying to "rob Peter to pay Paul" by committing to lower business rates but increased corporation tax - a charge denied by Mr Perkins.

The shadow minister said Labour would only raise corporation tax for big companies, but Tory Angie Bray and Mr Lewis said this would have a domino effect on small firms who rely on bigger ones for work and contracts.

Mr Lewis told MPs: "It is fantastic to see that the Labour Party now finally actually have a policy on local government. Unfortunately it's their only policy and it's not a very good one.

"It's all well and good calling for a cut in business rates but what the opposition's motion strangely doesn't mention is that they would hike up business taxes to pay for it."

Labour pressed for a vote on its motion, which called for action to "ease the burden of business rates on all sectors", but it was blocked by 271 votes to 216.

The government amendment, effectively rejecting Labour's motion was backed 271 to 214.

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