The next government should not stifle the ambition of entrepreneurs, says Frances Dickens, CEO of Astus Group, in the fifth of our pre-election blogs
Entrepreneurs and SMEs have been at the centre of a tug-of-love between the main political parties in this campaign and with good reason: the UK’s 5.2 million small businesses accounted for 48% of UK private sector employment and 33% of private sector turnover. In other words, we are a key force in economic growth. Starting a business involves huge risks, sleepless nights and a huge sense of responsibility to our employees. This is why I’m asking the next government to incentivise us by:
Keeping the economic recovery on track
This is especially important if no clear winner emerges on May 7. The last thing the UK needs is political infighting between parties more interested in personal interests than the recovery. Weak growth figures in the first three months of this year are an indicator of how fragile our recovery really is.
Limiting government intervention
It’s not up to governments to create jobs. As the figures clearly show, entrepreneurs and small businesses make a disproportionate contribution to job creation so let us get on with it. Instead, the next government needs to carry on creating the conditions that both encourage inward investment to the UK and in which SMEs can flourish. If done right, millions of real jobs will be created.
Maintaining corporation tax at 20% or reduce it further
Currently our corporation tax is one of the lowest in Europe which is good news as far as our competitiveness is concerned. It’s no coincidence that Singapore whose corporation tax is 17% – one of the lowest in the world – enjoys high inward investment and low unemployment.
Cutting business rates
The UK currently has the highest business rates in Europe and this needs to change, especially if our high streets are to have any hope of competing with online giants such as Amazon. Any reduction in rates could be passed onto consumers, which would be good news for the economy. I don’t accept that there needs to be a trade-off between reducing business rates and increasing Corporation Tax – we want to make the UK more, not less, competitive. A comprehensive review of business rates needs to include whether future rate rises should rise in line with the consumer prices index (CPI) measure of inflation, rather than in line with retail prices index which has been higher than CPI in recent years.
Not punishing entrepreneurs for doing well
Successful businesses drive the economy and underpin the welfare system. Most of us are happy to contribute; however, given the demands and risk involved in running a business, I feel we should be able to keep more of what we earn than we pay in personal, property and business taxation. Taking money away from people who contribute most will stall investment and blunt entrepreneurial ambition. Whoever is in power this time next week needs to keep that in mind.