Labour's corporation tax plans threaten our business-friendly environment

A business group has warned that Labour's plans to hike corporation tax threaten the attractiveness of the UK as a business location.

Today Labour leader Ed Miliband will pledge to scrap plans to reduce corporation tax, in order to fund a small two year business rate freeze. The proposal will see UK firms paying £785m more in tax in 2016-17.

The Institute of Directors' Simon Walker has said that the move is "better politics than it is economics", and creates "a false distinction between small and large businesses".

Walker says that all companies benefit from a more competitive environment, and that the main corporation tax rate is paid not only by multinationals, but medium and small businesses.