After months of campaigning, the general election is almost here. This Thursday, Britons go to the polls, with experts predicting no overall majority and results potentially so fractured that even forming a coalition could prove tricky.
Naturally, business owners will be concerned about how the new Government – whoever it comprises – will affect them post May 7. Access to business funding, economic growth, and a simplified tax and regulatory system are all areas worrying many. So, what are the major parties offering small companies if they get to Number Ten? We look at the party manifestos and promises to tell SMEs everything they need to know ahead of Thursday’s vote.
The Conservative Party
The Tories typically get a strong backing from big industry, but they say they’re also “on the side of small business”. In fact, the Conservatives have a main manifesto and a specific small business version. But what are they actually promising small firms?
- National Insurance savings. Firms employing under-21s won’t have to make NI contributions, and the Employment Allowance will free SMEs from the first £2,000 of NI bills.
- Boost business numbers. Tories have vowed to increase the number of business start-ups by 600,000 every year until the end of the next Parliament by trebling the Start-Up Loans programme.
- Help for the self-employed. A thorough review of conditions for self-employed people would be undertaken under a new Conservative Government.
- Business rates review. The Tories repeated their commitment to conduct a review into the unpopular premises tax by the end of 2015, and a promise to deliver by 2017 a system befitting the 21st century, where physical shops compete with online retailers. They would also make the Office of Tax Simplification permanent to reduce the tax burden on businesses.
- Reducing red tape. The current Government claims to have already saved SMEs £10 billion by slashing red tape. Conservatives are committed to removing a further £10 billion worth for small firms, and to continue the One-In, Two-Out pledge on new laws.
The Labour Party
When it comes to the small business community, the Labour Party under Ed Miliband has been keen to paint itself as being representative of SMEs’ concerns rather than those of big business, and has vowed a number of things in its manifesto to support smaller companies.
- Access to finance. A British Investment Bank would be created to improve SMEs’ access to funding, along with a network of regional banks. Labour wants to test the market share of the existing high street banks, and encourage the creation of at least two new challenger banks to improve competition.
- Tax cuts – and increases. Business rates would be cut and then frozen for 1.5 million smaller business properties. Companies signing up to pay the living wage in the first year of a Labour Government would get tax rebates via the party’s Make Work Pay contracts. The top rate of income tax for those earning more than £150,000 would be raised to 50p.
- Improving employee rights. Zero hours contracts would be banned, and the National Minimum Wage would be increased to more than £8 an hour by October 2019. Labour would also reverse the Tories’ introduction of fees for employment tribunal claimants.
- Cutting energy costs. Energy bills would be frozen until 2017, and small enterprises would be freed from unfair contracts and automatically-applied tariffs. Rail fares would also be frozen for a year, cutting SMEs’ travel costs.
- A small business voice in Government. A Small Business Administration would be formed to ensure SME issues are heard at the highest level. Procurement contracts would also become more accessible to smaller firms.
- Apprenticeships. The party would guarantee every eligible school leaver apprenticeship training, and businesses with major Government contracts would have to take on apprentices.
- HMRC review. The party has promised to conduct a review into the tax office to ensure it investigates all businesses, large and small, not disproportionately targeting SMEs.
- Infrastructure input. Labour would improve rail links in the North to boost the regional economy, increase investment in roads, and expand airport capacity in London and the South East. An independent National Infrastructure Commission would also be set up.
The Liberal Democrats
It’s set to be a tough election for the Lib Dems who’ve been tainted by their time in coalition with the Conservatives. But they’ve made a bid to woo small business owners in their election manifesto.
- Improve small business finance. The Lib Dems have pledged to expand the British Business Bank, and to support alternative finance providers, partly by encouraging Local Authorities to use these platforms to improve credit access for businesses. A new community banking sector would be created to support SMEs. The Regional Growth Fund would be continued, with £16 billion of private investment allocated to companies of all sizes.
- Provide better SME support. A one-stop-shop advice service for medium-sized firms would be created, along with a dedicated unit within HMRC. The reach of Local Enterprise Partnerships would be strengthened, opening up procurement to small and medium businesses.
- Prioritise SME tax cuts and reducing business regulation. Business taxes would be made more competitive, with SMEs first in line to benefit. Reforms to the Regulatory Policy Committee could also reduce red tape.
- Replacing business rates with a land value tax (LVT). The business rates review would be completed in England, and replaced, in time, with a land value tax, which is calculated on the rental value of land.
- Boost apprentice numbers. The Liberal Democrats would double the number of businesses hiring apprentices, tackling skills gaps.
The best of the rest
- The UK Independence Party’s main issue is an exit from Europe, and its manifesto outlines how SMEs would be allowed to choose British workers over non-native staff. The party would also cut business rates by 20 per cent for firms with a rateable value under £50,000. Firms could collect evidence of repeated late payments for submission to HMRC, which would conduct its own investigations against offending companies. Tendering for public contracts would be made easier by removing the need for compliance in some areas.
- The Green Party. In their manifesto, the Greens say they’d raise minimum pay to a living wage of at least £10 an hour, but small firms would be helped covering this using receipts from a wealth tax, which would reduce National Insurance to eight per cent. About £2 billion would be invested in a network of community banks, mutually owned and serving their local area.
- The Scottish Nationalist Party. Business voters north of the border may be attracted by the SNP’s manifesto pledge to create a fair payment law, addressing overdue invoices. A more targeted approach to business taxation is proposed, as is the founding of a Scottish Business Development Bank.
- Plaid Cmyru. Welsh business owners may vote for Plaid Cmyru for its manifesto promise to scrap business rates for all firms with a rateable value of less than £10,000. There will also be support for Welsh speakers to develop their own businesses, and to use their native tongue in their enterprises every day.
In truth, whoever comes to power, it will be business as usual for most SME owners. But Britain’s 5.2 million small and medium businesses are a sizeable force to be reckoned with, so whatever your political views, get to the polling station this Thursday. Casting your vote in the general election is making SMEs’ voices heard – and potentially striking a blow for your business.