Labour's £800m Tax Break For Small Business

By Jon Craig, Chief Political Correspondent

Ed Miliband will later offer an £800m tax break to smaller companies and pledge to make Labour "the party of small business".

The first act of a Labour government, if it wins the next General Election, will be to reverse a hike in small business rates due in April 2015 and to freeze the levy the following year, the party leader will say.

Labour calculates the move will be worth an average £450 over two years to 1.5 million businesses, including shops, pubs and hi-tech start-ups, and up to £2,000 for some firms.

It would be paid for by scrapping the coalition Government's planned cut in corporation tax from 21% to 20%.

In his speech to Labour's conference in Brighton, Mr Miliband will say he wants growth in the UK economy to benefit "hard-working families" including small business owners, and not just the "privileged few".

Borrowing a slogan from Ronald Reagan's successful 1980 bid for the US presidency, he will say voters should ask themselves in 2015: "Am I better off now than I was five years ago?"

He will also risk a backlash from countryside campaigners by launching a "road map" for the construction of a generation of new towns in England in a bid to solve the housing crisis.

Labour insiders did not identify areas which might come under consideration for new towns, but said Mr Miliband wants to ensure families are given better access to new homes, and communities which want to grow are helped to do so.

The Labour leader will accuse David Cameron and George Osborne of "boasting" about fixing the economy when the proceeds of growth have only gone to a minority.

He will argue life for ordinary families has been getting harder, thanks to a "cost of living crisis" caused by soaring bills and wages which fail to keep pace with inflation.

"Too many of the jobs we're creating in this country are just too low-paid, too many of the gains in our economy are just scooped up by a privileged few, including those with big bonuses," he will say.

"And too often you are left being charged over the odds. They used to say 'a rising tide lifts all boats'. Now the rising tide just seems to lift the yachts."

Mr Cameron has often said his economic policies are designed to help the UK compete in a "global race" for prosperity.

But Mr Miliband will accuse the Conservatives of pursuing a "race to the bottom", in which prosperity for a few is bought at the cost of worsening wages, conditions and workplace rights for the majority of workers.

Ed Miliband says he wants growth to benefit 'hard-working families'

Labour would instead offer "a race to the top", with support for small firms to become the wealth and job creators of the future.

"You've made the sacrifices. But you've not got the rewards. You were the first one into the recession, but you are the last one out," he will say.

"Will the pain be worth it for the gain under this Government? No. They aren't going to solve the cost of living crisis. Because for them, it is not an accident of their economic policy, it is their economic policy.

"David Cameron talks about Britain being in a 'global race'. But what he doesn't tell you is that he thinks the only way Britain can win is for you to lose.

"For the lowest wages, the worst terms and conditions and the fewest rights at work - a race to the bottom. The only way we can win is a race to the top."

Mr Miliband will say 80,000 big businesses have already benefited to the tune of £6bn in reductions in corporation tax under the coalition Government, while 1.5 million small firms will have seen their business rates rise by an average of almost £2,000 by the end of this Parliament.

Labour's decision to hold business rates at 2014 levels for two years would affect properties and commercial premises with an annual rental value of £50,000 or less.

The Labour leader out in Brighton at the weekend

This would mean some franchise-holders operating branches of major multinationals benefiting from the change.

The move would save small firms a total of £250m in 2015/16 and £540m in 2016/17, according to figures from the House of Commons Library.

Halting the 1% cut in corporation tax would raise an estimated £340m in the first year and £785m the next, but Labour insists that any extra money will be passed on in further cuts to business rates and not taken as additional tax revenue for the Treasury.

Explaining his decision to target tax breaks on small firms, Mr Miliband will say: "Most of the jobs of the future are going to be created in a large number of small businesses, not a small number of large businesses.

"And most of the new jobs that British people will be doing in 15 years' time will be in new companies.

"That's why we have to support our small businesses, the vibrant, dynamic businesses that will create wealth in Britain."

He will also caution activists at Brighton that a Labour government would not have funds to lavish on spending hikes.

"We won't be able to win the race to the top by spending money we don't have," he will say.

"You know and I know that the next Labour government will face tough times, and there's no point in pretending otherwise.

"We have to deal with the deficit and that means we need to win the race to the top in a different way, based on the jobs we create, the businesses we support, the talents we nurture, the wages we earn and the vested interests we take on."

:: Watch Mr Miliband's speech live on Sky News from 2.15pm.

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Fewer Town Centre Shops Closing Their Doors

Town centre shops shut at an average of 18 a day during the first half of 2013, reflecting continuing economic and evolving social pressures on the high street.

However, the closure rate fell from more than 20 during the same period last year, according to the report from accountants PwC compiled by the Local Data Company (LDC).

It highlights the continuing change in the make-up of the high street - with a declining number of women's fashion stores and camera shops as consumers' demands change.

Charity shops, betting shops and cheque cashing outlets picked up the slack, the study suggested.

Video and photography outlets - following the insolvencies of Blockbuster and Jessops respectively - suffered most, while women's fashion was hit by intense competition from major chains and online offerings.

The study of 500 UK town centres showed 3,366 outlets closed in the six-month period, compared with 3,157 openings, a net reduction of 209 shops.

This was an improvement on the net reduction of 953 over the first half of last year.

Coffee shops and hearing aid outlets were among those increasing, the research showed, as were convenience stores as large supermarket groups move into the sector to bolster their market share.

Mike Jervis, insolvency partner and retail specialist at PwC, said: "Upticks in areas such as cheque cashing and pawnbroker reflect a society where a sizeable part of the population is forced to turn to these types of borrowing for basic needs."

Matthew Hopkinson, director of the LDC, added: "The good news is that the significant decline in chain retailer numbers in town centres in 2012 is slowing down.

"That said, closer examination of the data shows the significant ongoing decline of traditional shops, with food, beverage and entertainment taking their place.

"The pressure from online competitors, supermarkets and out-of-town providers will only increase," he warned.

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eBay And Argos Strike 'Click & Collect' Deal

eBay and Argos have joined forces to offer a 'click & collect' service as retailers rush to cash-in on the growth of online shopping.

At least 50 merchants using the online marketplace will participate in a trial of the service, which will enable eBay customers to collect their goods from a choice of 150 Argos stores.

The companies said the trial - expected to last six months - was delivering what customers wanted as demand for click & collect  grows.

More follows...

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Osborne Faces Scepticism Over Lloyds Sale

By Mark Kleinman, City Editor

George Osborne is facing scepticism from inside his own department about the prospect of a multibillion pound sale of Lloyds Banking Group shares to the general public.

Sky News understands that some Treasury officials are expressing private concerns about the complexity of a retail offering of part of the Government's remaining 33% stake in Lloyds.

A mass public sale of shares in the bank is widely-seen as likely in the early months of next year following last week's successful placing of a 6% stake through a deal which raised £3.2bn.

The Chancellor must convince Treasury officials of the sale

The Chancellor wrote to Andrew Tyrie, chairman of the Treasury Select Committee, following the transaction, saying that he would "consider all options for later sales of our shareholding in Lloyds, including a retail offering to the general public".

The idea is backed by many of Mr Osborne's allies, who believe that such a sale would be politically beneficial in the run-up to the next general election.

However, some Treasury officials believe that the likely requirement to publish a full prospectus as well as the delay between doing so and executing an actual sale of shares would be far riskier than further transactions such as last week's.

Value-for-money for British taxpayers would be the "overriding consideration" when planning future disposals, the Chancellor told Mr Tyrie.

Andrew Tyrie, chairman of the Treasury Select Committee

A public offering would not necessarily involve a giveaway of the shares, although that idea has been advocated by a number of think-tanks.

There remains significant demand among institutional investors for Lloyds shares, and any retail offering would encompass only part of the Treasury's remaining stake in the bank, said one insider.

A decision will in any case not be made for months, since UK Financial Investments, which manages taxpayers' shareholding in Lloyds, said last week it wold not seek to further reduce its stake for at least 90 days.

It is possible to waive that commitment but it is seen as unlikely.

The Times reported in May that Treasury officials had similar reservations about a public offering of a stake in Royal Bank of Scotland, although RBS shares - unlike those of Lloyds - are trading at a significant loss on the taxpayer's investment.

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Labour Wants Bank Levy Hike To Fund Childcare

Working parents with children aged three and four would receive 25 hours of free childcare a week under new Labour plans.

Shadow chancellor Ed Balls will make the pledge to increase the hours covered by state funding from 15 to 25, where a single parent or both parents work.

The move, in his keynote speech to the Labour party conference in Brighton, comes after another proposal to extend childcare at primary schools from 8am to 6pm.

Under Labour's plans, which it suggests would be funded through an increase in the bank levy, the 15-hour early years entitlement would also remain universal.

The shadow chancellor with Ed Miliband and Rachel Reeves in Brighton

Mr Balls will also today attempt to underline the party's "iron discipline" on spending amid claims there is a £27bn black hole in its plans.

As he and Ed Miliband struggle to restore public trust in Labour on the economy, he will tell delegates the party has to be "straight" with the country about the action needed.

He has written to the Office for Budget Responsibility (OBR) to ask for an audit of its spending commitments but the watchdog cannot go ahead under its current remit.

Ed Balls playing football on Sunday

Tory Sajid Javid, who has released Treasury analysis suggesting Labour promises would require more than £1,000 in extra borrowing per household in 2015, called the move a "stunt".

The Treasury minister said: "Ed Balls knows this is not allowed under the Budget Responsibility Act and the OBR's Charter, so this is just a stunt to try and distract attention from the fact that Labour have been found out for making unfunded commitments that would just mean more borrowing and more debt.

"Nothing has changed - it's the same old Labour. Ed Balls and Ed Miliband still want more spending, more borrowing and more debt - exactly how they got us into a mess in the first place."

Labour has put the cost of living at the heart of its conference this year as it tries to rebuild confidence in its ability to handle the economy.

Mr Balls will claim the Government's bank levy has raised £1.6bn less than the coalition promised and that institutions paid £2.7bn less in overall tax in 2011 compared to 2010.

"At a time when resources are tight and families are under pressure that cannot be right," he will tell delegates.

"So I can announce today the next Labour government will increase the bank levy rate to raise an extra £800m a year.

"And we will use the money, for families where all parents are in work, to increase free childcare places for three and four- years-olds from 15 hours to 25 hours a week.

"For the first time, parents will be able to work part-time without having to worry about the cost of childcare."

The shadow chancellor will admit that Labour will face some "tough choices" if it regains power in 2015, and will not be able to reverse all of the Government's measures.

He will say growth and jobs "cannot magic the whole deficit away at a stroke" and that the coalition's spending totals for 2015/16 would have to be Labour's "starting point".

"Any changes to the current spending plans for that year will be fully funded and set out in advance in our manifesto," he will promise.

"There will be no more borrowing for day-to-day spending. And we will set out tough fiscal rules - to balance the current budget and get the national debt on a downward path."

He will add: "We won't be able to reverse all the spending cuts and tax rises the Tories have pushed through. And we will have to govern with less money around. The next Labour government will have to make cuts, too."

Ahead of the speech, he dismissed the Conservative claim about a £27.9bn black hole in his tax and spending plans.

"There are no uncosted spending commitments," he insisted on ITV's Daybreak. "There will be no more day-to-day borrowing from Labour in 2015."

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Apple Is Coolest Brand As Fashion Fights Back

Apple has retained its title as the coolest brand in Britain as big luxury names returned to the top, according to the CoolBrands annual survey.

While people may have stayed home and drowned their recession woes with scoops of Haagen-Dazs and Ben & Jerry's last year, both in 13 and 15 place in 2012.

This year the fashion houses have made a comeback with Chanel, Prada and Alexander McQueen, charting at 13, 14, and 19 respectively.

Apple is still the coolest brand in Britain

Ice cream is nowhere to be seen, while department stores Selfridges and Liberty, last year at 14 and 10, have both dropped out of the list.

Aston Martin, last year in third, was second, and Rolex, a no-show last year, was second. The sportswear brand Nike took fourth place.

The Glastonbury festival was fifth on the list and in a summer when almost no celebrity was seen without a pair of Wayfarers or Aviators, it is unsurprising that Ray-Ban was in at 10 – a brand that didn't figure in the top 20 in 2012.

Coleen Rooney in Ray-Ban Aviators at the Glastonbury festival

Stephen Cheliotis, chairman of the CoolBrands council, said: "While Apple remained number one this year, question marks remain as to how long they might hold this position in the face of an increasingly competitive set of rivals.

"Overall the top 20 saw a definite swing back to luxury brands as the affordable everyday brands slipped back.

"Fashion brands came back to the fore, with sport and music brands becoming more conspicuous.

"Whether it's due to strong heritage, product quality or quite simply a correlation with the reviving British economy, this year's CoolBrands list shows an increasing number of luxury brands are back at the top of the cool list, reversing last years' trend of affordable everyday luxuries dominating."

Aston Martin is the second coolest brand

The list is voted by 3,000 consumers and a panel of 38 "key influencers" such as the television chef, Gizzi Erskine, and model Daisy Lowe.

YouTube has dropped to sixth from second place, while Google and Twitter both dropped from their place in last year's top five to seventh and eighth places respectively.

BBC iPlayer also dropped from last year's sixth position to 16, Skype fell out of the top 20 altogether, while music streaming service Spotify is the only new digital entry at 20.

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BlackBerry Slashes Jobs In Face Of $1bn Loss

BlackBerry has confirmed it will cut 40% its global workforce as it said it expects to report that it has lost almost $1bn in its second quarter.

The smartphone company said it will lay off 4,500 employees as it tries to slash costs by 50% and shift its focus back to competing mainly for the business customers most loyal to its brand.

The Canadian-based firm had been scheduled to release its net earnings for the quarter next week but warned on Friday that it expects to post a staggering loss of between $950m and $995m.

Shares in the company plunged as low as $8.01 when the stock reopened for trading on Friday, before closing down 17% at $8.72.

Thorsten Heins, president and CEO of BlackBerry, said in a statement: "We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability.

"Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user."

BlackBerry boss Thorsten Heins says the changes are hard but 'necessary'

BlackBerry said last month that it would consider selling itself and reiterated on Friday that a special committee of its board of directors continues to "evaluate all options".

The BlackBerry, pioneered in 1999, was the dominant smartphone for on-the-go business people and other customers before Apple debuted the iPhone in 2007. Since then, BlackBerry has been hammered by competition from the iPhone as well as Android-based rivals like Samsung.

In January, the company unveiled new phones running a revamped operating system called BlackBerry 10. The Z10 and Q10 were designed to better compete for customers and rejuvenate the brand, but BlackBerry's market share continues to lag behind its rivals.

BlackBerry, formerly known as RIM, was once Canada's most valuable company with a market value of $83bn in June 2008.

Canada's industry minister James Moore said in a statement: "Our thoughts are with those who have lost their jobs at BlackBerry, it is always a cause for concern for our Government."

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City Funds In Last-Ditch Bid For RBS Branches

By Mark Kleinman, City Editor

A consortium of City investors has tabled a last-ditch bid to win control of 315 Royal Bank of Scotland (RBS) branches by pledging a substantially-higher payment to the taxpayer-backed lender.

Sky News understands that W&G Investments, a vehicle set up specifically to buy the branch network, tabled a revised offer within the last 48 hours even as RBS began leaning towards backing a rival bid involving the Church of England's pension fund.

The revised offer is not understood to include a substantial hike to the £1.1bn up-front cash payment promised by W&G in its original bid.

However, it is said to have altered its proposal to mean that RBS would receive additional payments on completion of a deal that would take the total value of its offer to well over £1.5bn.

Headed by Andrew Higginson, a former Tesco finance director (and non-executive director of BSkyB, the owner of Sky News), W&G's backers include leading fund managers such as Old Mutual, Schroders and Threadneedle.

RBS favours an alternative bid from a consortium led by Corsair Capital, an investment firm whose executives include Lord Davies, the former trade minister.

The branch network is being sold under the state aid deal that resulted from RBS's bail-out by British taxpayers in 2008, with the bank set a deadline of this autumn to offload it.

However, RBS is keen to retain a stake in the branches to share in a potential increase in value ahead of a flotation in what amounts to a bet on the recovery of the UK economy.

Unlike W&G's proposal, which would involve an outright takeover of the RBS branch network, the Corsair bid would entail buying just 49% with the remainder being listed on the stock exchange at an unspecified future date.

Sky News revealed in July that the Corsair bid was being backed by the Church Commissioners for England in an attempt to establish an ethical dimension in the group's vision for the small business-focused bank.

An earlier deal to sell the network, codenamed Project Rainbow, which comprises all RBS-branded branches in England and NatWest branches in Scotland, fell through last year when Santander UK pulled out citing concerns about IT systems.

Santander had initially agreed to pay £1.65bn for the branches, which include £19bn of assets, 250,000 small business customers and approximately 5,000 staff.

W&G and RBS both declined to comment.

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Food Price Rises 'A Source Of Stress'

Rocketing food prices are a "source of stress" for four in 10 UK consumers, while a third say they are struggling to feed themselves or their family.

Almost eight in 10 shoppers (78%) are worried about the increasing cost of food, with almost half (45%) spending a larger proportion of their available income at the supermarket compared to a year ago, the survey of 2,028 consumers for Which? found.

Food prices have risen over and above general inflation by 12.6% over the past six years, according to the Office of National Statistics, while incomes have stagnated.

The poll found 60% are worried about how they will manage their future spending on groceries if prices continue to rise.

A separate survey by the consumer watchdog found one million more households are feeling financial pressure compared to a year ago, leaving 9.5 million households struggling to cope with the cost of living. It found 40% are likely to cut back spending on food in the next few months.

Richard Lloyd, Which? executive director, said: "While people seem to have accepted their grocery bill going up, stagnating incomes and rocketing food prices are causing stress and worry and leaving people wondering how they are going to cope.

"Supermarkets need to make it much easier for consumers to spot the best deal by ensuring pricing is simple and making special offers genuinely good value for money.

"Politicians need to put consumers at the heart of their economic policies to tackle the rising cost of living and to support growth and prosperity."

Dan Crossley, executive director of the Food Ethics Council charity, added: "As the global food system becomes more deeply trapped in the strangleholds of resource constraint, climate change and population growth, rising food prices are an almost inevitable fact of life.

"Food businesses and government need to start planning now for that future by taking urgent action to tackle the issue of food affordability, including the introduction of measures such as a living wage.

"They also need to develop robust policies that make healthy food affordable, rather than peddling 'cheap' food that is costing us dear in terms of our health and our environment."

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Buying A House 'Cheaper Than Renting'

Home buyers are almost £900 better off a year than those who rent - but an upturn in house prices means the gap has narrowed in recent months, a report has found.

Research by Halifax, which based its calculations on its own database as well as official figures, found that people buying a three-bedroom house face typical costs of £672 a month, which is £73 less than the average £745 a month cost of renting.

Five years ago, renting was considered much more financially attractive than buying, but home buying costs have since fallen by more than a third, meaning that buying has become cheaper than renting.

Falls in house prices following the economic downturn combined with low mortgage rates in the low interest rate environment have all contributed to the about-turn.

Meanwhile, rental costs have been pushed higher by strong demand in the sector, as many renters have struggled to get on to the property ladder.

But a return to activity in the housing market has pushed house prices up, which means that the gap between buying and renting costs has narrowed from a difference of £78 a month one year ago.

Halifax recently reported that prices nationally have risen by 5% over the last year. Other reports have recently put prices in London at around 10% higher than they were a year ago.

People living in London and Northern Ireland have the most to gain from buying rather than renting, the research suggested. The gap in percentage terms is biggest in Northern Ireland, at 11%. Buying in Northern Ireland costs £369 a month on average, while renting costs £415.

In cash terms, Londoners have the most to gain from being on the property ladder, with a saving of almost £100 a month.

Wales and Yorkshire and the Humber were the only areas of the UK where renting was found to be more affordable than buying. In Scotland, buying was found to work out £27 a month cheaper than renting.

Martin Ellis, housing economist at Halifax, said: "A combination of lower mortgage rates and declining house prices has substantially reduced the cost of buying over the past six years.

"Nevertheless, the number of home buyers in the 12 months to June 2013 was nearly half of that in 2008, which will have been constrained by worries over job security."

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