News

April 23, 2010

Party manifestos provide clear choice for small firms, say business groups

The three main political parties’ proposals for business reform provide a clear choice for small firms, say business groups.

The Conservatives, Labour and the Liberal Democrats unveiled their manifestos over consecutive days in the middle of April, ahead of the 6 May General Election.

According to the Federation of Small Businesses’ (FSB) head of public affairs, Stephen Alambritis, all three have provided enough information about their business policies to allow small firms to choose between them.

“All are pitching for the small business vote,” he said. “It’s entirely up to the business owners who they vote for, but all three parties have given plenty of information on what they will do regarding tax, employment issues, regulations and infrastructure, to allow small businesses to make a clear judgement.

“General Elections are dominated by health, education, home affairs and foreign affairs, but we would like to see more discussion of the issues that face small firms in the run-up to the election,” added Alambritis. “In each super-marginal constituency, where the majority is very small, there are more than 1,000 business owners, so their vote really can make a difference to the outcome of this election.”

British Chambers of Commerce spokesman, Sam Turvey, added: “All three manifestos contain some good measures for smaller companies.

“There are some clear dividing lines between the political parties, most noticeably over National Insurance and infrastructure,” Turvey said. “The Conservatives would scrap most of the planned NICs rise, but Labour would not. However, Labour would build a third runway at Heathrow, which business wants, whereas the Tories would not.

“However, to date, we’ve seen too many populist vote-winning pledges from the leaders and not enough on exactly how the budget deficit will be brought down, and how the best possible business environment will be created for small firms,” he added.

Here are the main proposals for businesses made by each party.

The Labour Party:

• £4 billion funding through the UK Finance for Growth Fund, with the Growth Capital Fund focusing on smaller businesses
• Continue the HM Revenue & Customs (HMRC) Time to Pay scheme to allow small firms to delay tax payments
• Reduce the cost of regulation for businesses by more than £6 billion by 2015
• Continue support for the Regional Development Agencies (RDAs) to aid economic recovery
• Increase NICs by one per cent from April 2011, except for anyone earning under £20,000.

The Conservatives:

• Create more diverse sources of funding for small businesses, including a National Loan Guarantee Scheme
• Cut the corporation tax rate for smaller companies from 22p to 20p
• Aim to deliver 25 per cent of Government research and procurement contracts through small firms, by cutting administrative costs and breaking up large ICT projects into smaller ones
• Make it easier to start up a new business by moving towards a “one-click” registration process
• Scrap Labour’s planned NICs increase.

The Liberal Democrats:

• Establish Local Enterprise Funds for local investors to contribute to growing businesses in their area, and launch a Creative Enterprise Fund
• Reduce the burden of red tape for small businesses by regularly reviewing the cost and effectiveness of regulations, and working towards a “one in, one out” policy for new rules
• Reform business rates to ensure that rates are based on site values rather than rental values, and to make business rate relief automatic
• Reform RDAs to make them more cost-effective and allow them to be scrapped if local support is low
• Scrap Labour’s planned NICs increase, after identifying alternative sources of revenue.

• For more information on the political parties’ election pledges for small firms, download a summary from the Federation of Small Businesses’ website