April 1st, 2015.
What Can Small Businesses Expect from the General Election?
In the run-up to the general election, the political parties have been fighting their way to the top, making pledges of what they plan to offer businesses if they are successful in coming into power.
According to the StartUp Britain tracker, there are record numbers of small firms in the UK, with more than 184,000 new businesses registered in Greater London alone in 2014. These firms account for an estimated 11.4m employees – that’s 47% of total UK private sector employment. So, what can these businesses expect from the major parties at the general election?
Cutting Red Tape
The Conservatives and the Liberal Democrats have not been quiet about their wish to cut red tape. The Conservatives are the most passionate regarding these plans, standing by the fact that small businesses are “disproportionately affected by regulation”.
The Tories claim that through making cuts in red tape, they will be able to save £10bn over the next five years. Under new rules, any department which introduces a new regulation has to justify it with a double cost saving. A draft deregulation bill has also been put in place which includes measures to eliminate unnecessary health and safety rules. In addition to a pledge to cut down on red tape, the Liberal Democrats have promised to establish a Regulation Advisory Board which should comprise of regulations that promote low carbon and efficient innovation. Labour has declared that if elected, they will set up a Small Business Administration. This would be replicating a US agency that is set up to assist entrepreneurs and small businesses. The party has also committed to increasing competition in banking by bringing at least two “challenger” banks onto the high street.
Slashing Business Rates
Labour has committed to cutting business rates in 2015 and then freezing them in 2016 for over 1.5 million business properties. On the other hand, the Liberal Democrats have said that they will review business rates, which are a “disproportionate burden” on small businesses, and look at alternatives.
A spokesman for the party said that the review will cover the option of moving to site value rating within five years, and in the longer term land value taxation more broadly.
In the last autumn statement, Chancellor George Osborne said there would be a review of the rates system and, according to the Tories, the rate relief has been doubled until April of next year. There have been consistent calls among businesses for changes to the system which governs rates, to tackle discrepancies between bills depending on the size and location of businesses.
Read more: Is an Overhaul of Business Rates Needed?
Enhancing Regional Development
The Liberal Democrats have committed to expanding manufacturing in areas such as motor vehicles, aerospace, low-carbon energy and chemicals to increase international trade.
A spokesman said they will continue the Regional Growth Fund, which encourages investment in areas dependent on the public sector, through the next parliament if they are returned. The party have said that they will invest in major transport improvements and infrastructure to create a ‘Northern Economic Corridor’; a focus for growth, innovation and prosperity across northern England.
Labour has pledged to create a British Investment Bank and a series of regional banks. These aim to boost lending for small businesses and “powerhouse” economic regions with funds to support local growth.
The Conservatives have acclaimed the transfer of power and budgets to cities in the North, with plans to transfer power in Manchester to a city-wide elected Mayor. The will result in Mancunians being able to have a more powerful voice as well as enforcing practical improvements including better transport links, an Oyster-style travel card, and more investment in skills and the city’s economy.
Similar to their coalition partners, the Tories have also turned to the Regional Growth Fund as one of their achievements and the backing of the proposed high speed rail route between Leeds and Manchester.
Talk to Pure Commercial Finance Today
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