UK Politics

Business worried about Miliband tax and wage calls

Business leaders have expressed concerns after Ed Miliband urged higher bank taxes and more agency worker protection.

In his first conference speech as opposition leader, he said Labour must be the party of small business.

But his call for a living wage and a bigger bank levy has alarmed employers.

The CBI said firms would be "worried" and the Institute of Directors said it was a "drift away" from a pro-enterprise agenda.

In his hour-long speech, Mr Miliband urged both trade unions and business to act responsibly during a time of austerity and said his priority was to restore sustainable economic growth.

'Old thinking'

He criticised the Blair and Brown administrations for being "naive" about regulation of financial markets and not foreseeing the impact of increased immigration from Europe on the pay and conditions of British workers.

"We have to challenge the old thinking that flexible labour markets are always the answer," he told delegates.

"Employers should not be allowed to exploit migrant labour in order to undercut wages. And if we have free movement of labour across Europe we need proper labour standards in our economy, including real protection for agency workers."

Mr Miliband reiterated his support for a living wage - set higher than the current minimum wage - as the necessary "foundation" of a fair economy and for an increase in the £2bn annual bank levy due to come into force in January.

"I say the people who caused the [financial] crisis and can afford to do more should do more: with a higher bank levy allowing us to do more to protect the services and entitlements on which families depend."

'Time for debate'

CBI director general Richard Lambert said Mr Miliband was right to suggest that Labour must be on the centre ground of politics and needed to regain its reputation for fiscal credibility.

But he added: "Companies will worry about some of the issues he raised, for example the living wage, agency workers and the bank levy. But he was careful not to get into detail, so there will be time for debate."

The Institute of Directors said some of Mr Miliband's ideas would hurt both large and small businesses.

"Ed Miliband says that he wants Labour to be the party of enterprise and small business," said its chief economist Graeme Leach.

"How are these sentiments reconcilable with a commitment to new employment regulations for agency workers and a large hike in the minimum wage? It is early days but we detect a drift away from New Labour's efforts to talk up a pro-enterprise agenda."