Thousands of the capital's firms were wrongly barred from a scheme to give tax breaks to new businesses, Labour claimed today.
Shadow Treasury minister Rachel Reeves said a National Insurance holiday worth up to £50,000 should cover London and the South-East, which were excluded.
"This flagship policy has been a flop where it was tried, but London and the South-East should not have been excluded," she told the Evening Standard.
"Small firms are the lifeblood of our economy but they have been let down by this Government."
London was left out because the scheme was designed to foster enterprise and growth in the regions, which had relied on old industries and public sector jobs. The scheme cuts NI payments by up to £5,000 for each of the first 10 employees of a new firm. Labour said fewer than one in 40 enterprises eligible took part.
Despite the Treasury setting aside £1billion to help 400,000 firms, barely 10,000 have taken part so far. Figures show that £6million was paid, supporting 12,400 jobs.
A Treasury spokesman said the Government was working to increase the number taking up the help. "The NICs holiday scheme is just one measure," he said. "We are also cutting the main rate of corporation tax, extending the small business rate holiday, supporting access to finance through the National Loan Guarantee Scheme and reducing regulatory burden."
