SMEs are repeatedly hailed as the lifeblood of the British economy and it seems that our political parties have stepped up their game to win the votes of those propping up the economy in next month’s general election.
With the Conservatives, Labour and the Liberal Democrats releasing their manifestos this week, here’s an overview of the policies that could lend a helping hand to small businesses. Hopefully it will help make up your mind come May 7.
David Cameron has promised to triple the number of start-up loans available to businesses to 75,000. The Tories also pledged to expand on their current initiatives for small business funding including an extended Funding for Lending scheme. The Conservatives vowed to fund three million apprenticeships using money saved from a reduced benefits cap and the party outlined its plans to provide loans to aspiring entrepreneurs by building a network of business mentors to support those seeking self-employment and franchising to return to the world of work.
Labour will lend money to start-ups and SMEs by creating a British Investment bank to make it easier to start and grow a business in the UK. This will be funded by an increase in mobile phone licence fees.
The Lib Dems planned to achieve its goal of allocating £16bn of private investment to businesses of any size and sector by developing the Regional Growth Fund further.
In their manifesto, the Conservatives pledged to ease the burden of employer National Insurance (NI) contributions by making new businesses exempt from contributions on the first ten employees for two years. NI will be scrapped for those under 21, freeing up the pennies for youngsters and businesses alike. Under a Tory leadership, VAT and NI will not rise. The Tories also promised to cut corporation tax by 1% down to 20% for businesses with profits over £300,000. This tax will remain at 20% for companies with profits under £300,000.
Labour also vowed that there will be no rise in VAT and National Insurance and promised to cut and freeze business rates for 1.5 million small businesses. It declared that the corporation tax rate in Britain will be the lowest in the G7 economies.
The Lib Dems remained elusive about their business policies only offering that the tax system will remain competitive and that SMES are a top priority for any cuts on business tax.
The Conservatives vowed to create three million additional apprenticeships by 2020 and promised that no individual earning minimum wage will pay income tax, with an increase in the tax free allowance to £12,500. The Tories have also promised to abolish the default retirement age and will support auto-enrolment into pensions.
Labour vowed to increase the National Minimum Wage to £8 an hour by October 2019 and fines will be imposed on employers who do not pay it. It will also reward employers who pay the Living Wage with a tax rebate as well as making it a requirement for publicly listed companies to disclose if they pay the Living Wage. And Ed Miliband has been particularly vocal about his promise to abolish all zero hour contracts; the Labour manifesto says that people who have consistently worked regular hours for more than 12 weeks will automatically be entitled to a fixed-hours contract. Meanwhile, hefty £1,200 fees for employment tribunal claimants will be abolished to break down the barrier of workplace justice.
The Lib Dems planned to get a staggering four million new apprentices into the workplace by doubling the number of employers offering apprenticeships. The party also promised to increase the National Minimum wage for apprenticeships to £3.30 from £2.73 and increase the National Minimum wage to £6.70 this October.
In addition to our comprehensive guide on the parties’ business policies, we hope you now have more than enough information to help you cast your vote on May 7. Just make sure it’s a vote for your business!