BUSINESS: How election issues may affect firms
4:44pm Monday 26th April 2010 in News By Hannah Holdroyd, Federation of Small Businesses
With the general election now announced everyone is considering what to do with their vote.
The 2010 election is shaping up to be the most exciting since Labour swept to victory in 1997, and this is one year where every vote really will count.
As the owner of a small business you may be wondering where you want to cast your vote, and which political party will give you and your business the best deal.
This month we’ve been taking a look at what the three main political parties are offering small businesses in their manifestos so you can best draw your own conclusions.
Finance and tax:
- To increase National Insurance contributions by 1p except for those earning under £20,000
- To establish a UK Finance for Growth Fund of £4billion for: SMEs in need of finance; providing incentives for companies to invest through R&D tax credits; and to make additional capital available to social enterprises through the Social Investment Bank.
- To continue the Time to Pay scheme – a one-year holiday on business rates for small businesses; widening support for training and apprenticeships; doubling the Entrepreneurs Relief lifetime limit to £2 million.
- To create a new Small Business Credit Adjudicator.
- To end the default retirement at 65
- To increase the National Minimum Wage at least in line with average earnings, and introduce a £40-a-week Better Off in Work guarantee.
- To invest over £1 billion in broadband services over the next seven years.
- Commitment to a new high-speed rail line, linking North and South.
- Ruling out of national road pricing in the next Parliament.
- Support for the third runway at Heathrow.
- To set up a Green Investment Bank to invest in low-carbon infrastructure, with the Government’s stake funded by the sale of infrastructure assets.
- Commitment to Pay as You Save financing schemes under which home energy improvements can be paid for from the savings they generate on energy bills.
- To introduce a People’s Bank at the Post Office.
- To curb restrictive covenants applied by pub companies to property sales and introduce flexibility for pubs to provide related services promoted, making it easier to have live entertainment without a licence.
- To strengthen and consolidate Neighbourhood Policing Teams (NPTs) and give support at a local level to the public and businesses in the fight against crime.
- To create a Supermarket Ombudsman.
Finance and tax:
- To reduce the impact of the increase in National Insurance (NI) to 13.8 percent by raising the primary and secondary NI tax thresholds.
- To exempt new businesses from paying NI on their first ten employees for year for two years.
- To use Government guarantees to create more diverse sources of affordable finance for SMEs.
- To simplify the tax system by cutting the main rate of corporation tax to 20 pence for small companies and remove complicated tax reliefs.
- To abolish the Default Retirement Age.
- To reinvigorate occupational pensions and work with employers and industry to support auto-enrolment into pensions.
- To build a network of business mentors and provide loans to would-be entrepreneurs, supporting self-employment and franchising as a route back into work.
- To give SMEs a £2,000 bonus for every apprentice they hire.
- To build a high-speed rail line connecting London, Heathrow, Birmingham, Manchester and Leeds with the continent through the Channel Tunnel, with construction to begin in 2015.
- To make utility companies that dig up roads accountable for congestion caused.
- To ensure that overseas trucks contribute towards the cost of road maintenance.
- To create a truly smart electricity grid.
- To open up government procurement to SMEs by reducing administrative requirements, with an ambition that 25 per cent of government contracts go to SMEs.
- To make small business rate relief automatic.
- To reduce police bureaucracy and get more officers on the beat.
- To reform regional business support to create business-led Local Economic Partnerships to respond to local business needs.
- To revive the rural economy, by reducing the barriers to business growth and creating incentives for rural development.
Finance and tax:
- To make the first £10,000 earned free of income tax.
- To simplify the corporate tax system by removing avoidance schemes.
- To reverse the 1 per cent increase in National Insurance after identifying matching spending cuts or alternative sources of revenue.
- To review the IR35 legislation and seek to replace it with simpler measures that prevents tax avoidance.
- To support the establishment of Local Enterprise Funds and Regional Stock Exchanges.
- To scrap compulsory retirement ages.
- Restricting Train to Gain funding to SMEs.
- To set up a Creative Enterprise Fund offering training, mentoring and small grants or loans to help creative businesses get off the ground.
- To set the minimum wage at the same level for all workers over the age of 16.
- To establish an Infrastructure Bank to direct private finance to projects such as new rail services green energy, high speed rail.
- Switching traffic from road to rail by investing in local rail improvements, such as opening closed rail lines and adding extra tracks.
- To prepare for the introduction of a system of road pricing in a second parliament.
- To introduce a rural fuel discount scheme to allow a reduced rate of fuel duty to be paid in remote rural areas.
- Protect greenfield land and our built heritage by reducing the cost of repairs.
- To equalise VAT on new build and repair on an overall revenue-neutral basis.
Keep trade local issues:
- To set up a Post Bank.
- To give smaller businesses fair access to public sector procurement by using standardised procurement requests, creating an online portal detailing opportunities.
- To require a local competition test for all planning applications for new retail developments and establish a local competition office within the Office of Fair Trading to investigate anti-competitive practices at a local and regional level.
- To make small business relief automatic and also seek to ensure that the burden is spread more equitably between small and large businesses.
- To put more police on the beat.
To find out more about small businesses issues and the general election, read the Federation of Small Businesses manifesto, Small Business Big Vote
Hannah Holdroyd is the London policy officer for the Federation of Small Business, the UK’s leading business organisation. She can be contacted at firstname.lastname@example.org