Miliband Sets Out Plan to Boost U.K.’s Business Productivity

U.K. opposition leader Ed Miliband set out his Labour Party’s plan to boost productivity, pledging to foster growth that benefits working families as he sought to win back business support.

In a speech on Monday at a Jaguar Land Rover Automotive Plc plant in Wolverhampton, central England, Miliband said the plan would move Britain away from a tax-and-spend model to one boosting business productivity to create “inclusive” prosperity.

“We need a better plan to replace an economy where tens of billions are lost in tax avoidance with an economy where tens of thousands more of our young people get apprenticeships,” Miliband said. “We need a better plan to help hundreds more businesses grow, succeed and create wealth.”

Miliband is seeking to counter attacks from company leaders in the past month who say his party is anti-business and that Labour gaining power in May’s election would be catastrophic for the U.K.’s economic prospects. His party’s program is “pro-business but not business as usual,” he said.

The Labour leader said his party will cut and freeze business rates and improve finance for small businesses.

“The jobs of tomorrow will come from a large number of small businesses, not simply a small number of large ones,” Miliband said.

Apprenticeships

Labour will guarantee that every school leaver with the necessary grades will be able to get an apprenticeship, Miliband said. By the end of the next five-year parliamentary term, the party is pledging to create at least 80,000 “high-quality” apprenticeships a year.

“It is time to match the aspirations of our young people with the high-quality apprenticeships they deserve,” Miliband said.

The pledge, entitled a Better Plan for Britain’s Prosperity, comes days after Labour’s finance spokesman, Ed Balls, sought to woo back business support by emphasizing the party’s opposition to the Tory promise of a referendum on Britain’s membership of the European Union.

With less than three months to go before the May 7 election, polls suggest neither Labour nor the Conservatives are on course for a parliamentary majority.

CBI View

While the Confederation of British Industry -- Britain’s biggest business lobby -- welcomed Labour’s intention to focus on productivity, it cautioned that the approach needs to be tailored for different sectors of the economy and that ultimately boosting productivity was “a job for business, not for government.”

“Addressing productivity is right,” CBI Deputy Director-General Katja Hall said in a statement. “It holds the key to raising living standards and making growth work for everyone. Productivity is different in every sector and the approach to each needs to be tailored if it is to work.”

Miliband also reiterated his party’s intention to crack down on tax avoidance after a week in which David Cameron’s government has been criticized over its handling of data about tax evasion leaked from HSBC Holdings Plc’s Swiss unit.

Labour has pledged to levy a one-time tax on bankers’ bonuses to help fund paid starter jobs for young people out of work for a year or longer. It also wants a British investment bank to help fund small- and medium-sized businesses and to create two new banks and increase competition among lenders.

Miliband also used the speech to reiterate his party’s criticism that Conservative policies only benefit the wealthiest in society. The Tories have said a Labour victory would mean “economic chaos” for Britain.

“We cannot simply succeed with redistribution or with tax and spend, but we must reform the way our economy works to make us more productive,” he said. Labour’s plan is “a route-map for turning the fortunes of working people and our country around. A plan for every sector, every firm, to raise productivity and make bigger profits and create inclusive prosperity.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE