Election 2015 – Party promises
What could the next four years have in store for small businesses? We take a look at the main political manifestos for Thursday’s General Election.
On Thursday the 7th May the UK goes to the polls to elect who they want to govern them. Newspapers, television shows and the radio are all full of election stories, party debates and last-minute attempts by political parties to swing voters to their side.
While immigration, Europe, Scotland and the NHS are the headline-grabbing stories of the election, small businesses are an important focus for all the main political parties. If you do not want to wade through the manifestos to find out what each political party has to say, we can give you a quick rundown of some of the main points. This is an independent blog, and I am not taking any political side or supporting any particular policy.
The Tories, Labour and the Green Party all say they will maintain the 20 per cent rate of corporation tax, in a bid to encourage growth. However, the Greens say that larger firms will have their corporation tax raised to 30 per cent.
The Tories promise there will be no increases in VAT, National Insurance contributions or income tax. They say they will back small firms with a major business rates review and will extend the 100 per cent small business rate relief. Labour wishes to freeze business rates for 1.5 million small business properties and will freeze their energy bills. UKIP says it will cut business rates for small businesses. If the business is in a property worth £50,000 or under, it will get 20 per cent rate relief. If the firm has more than one property, but their combined value is still under £50,000, it will still get the relief rate.
The SNP wishes to implement a targeted reduction in employers’ National Insurance contributions, to encourage job creation and promote a “living wage”. The Green Party says it will use receipts from a wealth tax to reduce employers’ National Insurance contribution to 8 per cent. It also wants to lobby Europe to make firms with a turnover of under 100,000 euros, VAT exempt. The Lib Dems want to reform business tax to ensure the UK stays competitive. The party wants to make small businesses the priority for cuts.
Another point where most parties seem to agree, is with the abolition of “exploitative” zero-hours contracts. A friend of mine, who runs a small business finds this policy most concerning. He has several people who have chosen to work for him on these contracts. He says that they do not want to deal with the hassle of being self-employed or freelance. It suits them to work in this way, when they want to work. Some zero-hours contract workers are being horribly exploited by businesses. But for small businesses, this is not always the case and in some cases these contracts suit the kind of employee that a small business may need.
The Green Party, Labour and the SNP all wish to ban these “exploitative” contracts. UKIP says that there should be a code of conduct to govern the use of these contracts. Companies who employ more than 50 employees, must offer full or part-time workers who are on these contracts for a year a full or part-time contract if the worker requests it. There should be no exclusivity clauses in zero-hours contracts and employees on these contracts must be given 12-hours’ notice of work and then must be paid whether they are then needed or not.
Improving small businesses access to finance and investment is also on many manifestos. The Tories want to increase the Annual Investment Allowance. The Green Party wants to increase access to finance by investing £2 billion in a network of community banks, mutually owned and serving local areas or particular groups. The Lib Dems say they want to improve access to finance for business.
The SNP will support an increase in the Employment Allowance from £2,000 per business per year to £6,000 per business per year, reducing the cost of creating and maintaining jobs. It says it will continue the Small Business Bonus. It is says it will seek to seed-fund capitalisation of the Scottish Business Development Bank, enabling new investment in Scottish business growth and innovation.
Labour wants to set up a British Investment Bank to lend money to small and medium-sized enterprises. UKIP says it wishes to pilot a scheme to access trade credit insurance for small businesses. The Government would then back a portion of the risk, giving small companies “the confidence to expand trade”.
Support for business in various ways is also highlighted in manifestos. The Tories want to establish a Small Business Conciliation Service to mediate disputes, in particular disputes over late payment. The Lib Dems want to set up a one-stop shop for accessing government support for medium businesses. The Greens want to implement legislation requiring that small businesses are paid on time and want to ensure that it is properly enforced.
UKIP wants to set up a scheme within HM Revenue and Customs giving small businesses a way to tackle late payment. If the small firms gather evidence of late payments and timely requests, the HMRC can then inspect the culprits. Fines would escalate for repeat offenders.
Some other policies range from simplifying PAYE and ensuring affordable high-speed broadband capable infrastructure is available to all small businesses (Greens); to trying to ensure local procurement for local and national governments to open up the supply chain to small businesses (Lib Dems, Greens) to cutting red tape for businesses by repealing EU regulations and directives (UKIP).
I think what I have taken from these manifestos is that all the political parties recognise the importance of small businesses in growing the UK economy. They want to support small businesses, who employ local labour and boost local economies and pay taxes locally. I think that, whichever party or parties are governing us next week, the value that small businesses offer to our economy will not go unnoticed and will hopefully not go unsupported.