Miliband's plan looks like revamped Big Society

BRITISH Labour Leader Ed Miliband's latest push to draw voters has all the makings of a little bit of history repeating.

After spending years dismissing Prime Minister David Cameron's 'Big Society' as a flight of fancy his latest policy initiative seems to have taken more from it than he may care to admit.

Commissioned by former Transport Secretary Lord Adonis Mr Miliband's "Mending the fractured economy" initiative looks more like an updated homage to the Conservative's Big Society than a genuinely new approach. For one thing it is the second time Mr Miliband has launched such a plan, having failed to garner much coverage or support in February. This time, however, he plans on going all out.

Ahead of his official announcement later today in Leeds Mr Miliband released a statement in which he said: "The next Labour government will ensure city and country regions, like this powerhouse economy in Leeds, get control of business rates revenues. So that any extra money raised here thanks to the efforts of you and everyone in this great city can be invested here.

"I know the next Labour government cannot solve every problem by pulling levers in Whitehall. We can only do it by working with, harnessing the ideas, energy and the dynamism of great businesses, cities and county regions so you can help build and share in a more successful and prosperous Britain."

Devolving power from Westminster to communities, supporting enterprise and innovation, and more emphasis on small businesses, these all may sound vaguely familiar and that would be because they are. 

Mr Miliband has come under fire recently for his scattershot approach to policies, accused by some as looking like a shopping list rather than an agenda. With his latest proposal he won't have done much to silence the critics.

The basic principle of the policy has been supported by some business groups, including trade body EEF which was reported as saying: "There will also be a financial impact and business will want to know whether it will be targeted to raise some of this revenue through additional taxation. Above all else businesses want consistency and certainty, so that current policies to promote growth and investment such as export support from UKTI, R&D tax credits and support for innovation through the TSB are not reduced.”

Concerns have been raised, however, as with Mr Cameron's previous idea, as to how it will be funded. Labour has proposed releasing £30billion in government funding, it is the tax implications which have been widely reported as of being most concerning to certain groups.

Matthew Fell, director of Competitive Markets at the CBI, told journalists: “The broader tax environment matters to business. Although we welcome the idea of broadening the sources of finance available, particularly to SMEs, the changes shouldn’t be at the expense of the wider tax environment. On the face of it, an ACE is a good idea. But if that’s at the expense of the headline rate of corporation tax then businesses would probably prefer to leave it.”

Meanwhile Richard Rose of BDO was reported in some newspapers as saying: "Introducing a relief to replace all this would require a fundamental re-writing of a lot of tax law which would cause considerable disruption.

"Business likes stability. For a long time now, debt has been tax deductible and equity has not been - and to introduce a whole new concept could create a lot of economic uncertainty.”

As with the Big Society before it this latest plan may turn out to be nothing more than a paper policy. It looks good written down but ultimately will prove unworkable as the costs and obstacles become clearer over time.