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Parties trade blows on job policies

Published 01/04/2015

Labour leader Ed Miliband is expected to announce that his party would put an end to zero hours contracts if they win the General Election
Labour leader Ed Miliband is expected to announce that his party would put an end to zero hours contracts if they win the General Election

The big parties exchanged blows on jobs on the third day of the General Election campaign, with Chancellor George Osborne accusing Ed Miliband of "an assault on everyday working people", while the Labour leader said Tories were only interested in "looking after a few big firms and individuals at the top".

Mr Miliband launched a flagship Labour policy which would outlaw the majority of zero-hours contracts by giving employees the right to a regular contract after 12 weeks of working regular hours.

But he was forced onto the defensive by a letter from 103 business leaders to the Daily Telegraph, which praised the "Conservative-led government" for supporting investment and job creation and lowering the main rate of corporation tax to 20p. They warned that "a change in course" on May 7 would threaten the recovery.

Chancellor George Osborne said the "unprecedented" letter showed that Conservatives were offering "business stability", while Labour's pledge to return the main rate of corporation tax to 21p represented "a huge risk to the British economy and to British jobs".

Speaking at a factory in Pudsey, West Yorkshire, operated by drinks firm Britvic - whose chairman, Gerald Corbett, signed the letter - the Chancellor said: " If you start to hike business taxes and confidence is undermined, then projects are shelved and investment doesn't come here to this country, you create an anti-business environment that leads to lost jobs, higher unemployment and families without the security of work.

"These are not abstract economic risks, they are an assault on everyday working people. They are concrete reasons why we have 36 days to save Britain's economic recovery."

The letter was particularly awkward for Labour, as its signatories included at least five previous party backers, including Dragons' Den star Duncan Bannatyne and theatrical impresario Sir Cameron Mackintosh.

But Labour pointed out that the signatories had between them donated £9 million to the Tories, while several had received honours, including Conservative peers Lord (Stuart) Rose, Lord Bamford and Baroness (Karren) Brady. Shadow business secretary Chuka Umunna said they represented "0.002%" of the country's 5 million companies, most of which would gain from Labour's plans to cut and then freeze business rates.

Liberal Democrat Business Secretary Vince Cable said the signatories had signed up "naively" to a Tory stunt and should "be careful what they wish for", as a Conservative government could mean exit from the European Union and "deep ideological cuts" affecting skills, science and the industrial strategy.

Deputy Prime Minister Nick Clegg said it was clear that the letter gave credit to both sides of the coalition Government for delivering economic stability. But he warned that the business leaders would be wrong to think a Conservative-only administration would act as "guarantors of that stability", as the Tories " want to lurch wildly off in a right-wing ideological direction".

Answering questions from workers at a factory in Huddersfield, Mr Miliband said: "It doesn't surprise me that businesses want lower business taxes. I understand the reasons why businesses want lower business taxes and we've actually got a plan to cut business taxes for small and medium-sized businesses because we think that's where the priority lies.

"But it does also go to the wider choice at this election. The Conservatives really believe that if all of the few corporations and individuals at the top are doing well, the wealth will magically trickle down for everybody else.

"We have tried that experiment over the last few years and it hasn't worked. We have seen falling living standards and falling wages and insecurity at work. I just have a different view about the way the country succeeds."

Mr Miliband said Labour would "end the exploitation of zero-hours contracts", because it knew that "security for working people is the bedrock of what makes Britain work".

Reaction to Labour's policy launch was mixed. CBI director-general John Cridland warned that Labour was "playing with the jobs that many firms and many workers value and need", while Christian May, of the Institute of Directors, described the proposals as "unnecessary and potentially damaging".

But TUC general secretary Frances O'Grady said: "We need a fairer system that guarantees zero-hours workers decent rights at work and stops them from being treated like second-class employees."

Meanwhile, Mr Osborne claimed that a Labour election victory could mean many more middle-income earners being dragged into the higher rate of income tax, after shadow chancellor Ed Balls declined to rule out a reduction in the threshold for the 40p rate.

Asked in an interview with ITV West Country if he was leaving the door open to changing the tax threshold, Mr Balls said he would "like to" take people out of the 40p bracket, but added: "But I have to be honest with people. The deficit is going to be £90 billion. I have got to find a way to get the deficit down in a careful, and staged and balanced way."

Mr Osborne said it was "pretty clear" that Labour wanted to reduce the level at which the 40% rate is payable while Conservatives would raise it from £41,900 to £50,000 by 2020, but his claim was dismissed by senior Labour sources as "Tory nonsense".

Mr Clegg said that Conservatives had a record of dragging more people into the 40p band in coalition, and added that Lib Dems did not rule out doing the same again, as their priority was raising the lower threshold - currently £10,600 - at which workers start paying income tax at 20p.

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