FSB praises Conservative Party’s ‘encouraging’ manifesto for small businesses

The Prime Minister sets out his pitch in one of his last chances to sway voters before July 4

Conservative Party’s ‘encouraging’ manifesto for small businesses

The Conservative party have set out their pitch in one of Rishi Sunak’s last attempts to lure voters in the run-up to this year’s general election. The Prime Minister and his Cabinet have spent the last few weeks laying down the foundation for their manifesto announcement. Mr Sunak took to the stage at Silverstone to announce a series of policies including a 2 per cent tax cut to National Insurance, the construction of 1.6 million homes over the next parliament and an increase of the child benefit threshold.

The Tories have put lower taxes at the heart of their manifesto, with plans to abolish National Insurance payments for almost all self-employed people. Policy Chair of the Federation of Small Businesses (FSB), Tina McKenzie, praised the Tory party for supporting the self-employed and encouraging entrepreneurship. “It was encouraging to hear the Prime Minister talk publicly about the talent, hard work and economic value of the self-employed,” she said. “FSB was founded 50 years ago as a campaign movement against a hike in National Insurance contributions (NICs) for the self-employed. Therefore, to see a major party pledge to scrap self-employed NICs within the next five years is an important moment as a bold and welcome move to encourage entrepreneurship.” 

However, Ms McKenzie wished to see more support given to directors of small limited companies, who have been excluded from the manifesto yet still make up a large proportion of entrepreneurs in the country. “We would, however, like to see a similar pro-enterprise tax offer to support the other major group of entrepreneurs – the one million directors of small limited companies who are a large, hard-working and job-creating part of the UK’s small business community,” she said. “Meanwhile, expanding the Employment Allowance to cut employer NICs would also tackle rising employment costs and create new jobs.” 

Ms McKenzie praised the Conservatives for scrapping raises on capital gains tax while keeping further increases to the VAT threshold under review. “Small firms will be pleased to see the Conservative pledge not to raise capital gains tax and protect small businesses with entrepreneurs’ business asset disposal relief,” she said. “For many small firms their business is also their pension and it’s right not to tax people all over again when they come to sell. It is encouraging to see the Conservatives keeping further increases to the VAT threshold under review, building on the recent rise which FSB successfully campaigned for and achieved. Exploring a smoothing mechanism to prevent those dragged into this tax facing a costly and bureaucratic cliff-edge is in line with another aspect of FSB’s campaigning on this issue. 

“Changing the formula for the disproportionately low business rates bills of the out-of-town warehouses of online giants provides a route to lifting more small firms out of business rates altogether, and to maintaining the rates reductions which exist for many hospitality, leisure and high street small firms in England.” However, Ms McKenzie has urged the next government to address the issue of late payments which continues to plague small businesses. “Poor payment practices by big businesses towards their smaller suppliers is a widespread problem which anyone wishing to form the next Government should seek to stamp out, in the interests of both fairness and more predictable cashflow which can be used for investment,” she added. “It is encouraging to see this problem recognised in the Conservative manifesto, and extending the powers of the Small Business Commissioner would be a helpful part of the solution.”

FSB has set out its own bold plan of action for whoever forms the Government for the next five years, with more than 150 recommendations to drive growth for the small businesses that provide jobs in local communities. The manifesto is aimed at driving economic growth and increasing the small business community from 5.5 million back to its pre-pandemic size of six million within the next Parliament. “Whoever wins the next election, there is a lot to do to make sure the UK has the strong small business economy we all need,” Ms McKenzie said.

Latifa Yedroudj
Latifa Yedroudj

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