The General Election 2017 for Small Businesses
On the 8th June 2017 the UK will be facing a snap general election, where – regardless of the victorious party - education policies, employment laws, and business taxes will all be set to change. Judging by their manifestos, the main parties certainly aren’t underestimating the power of the small business vote. And rightly so, considering the huge 90% of small businesses owners planning to take part and cast their vote.
We’re taking a look at exactly what they’re offering to the world of SMEs – but which parties’ policies would work best for you and your business?
Alongside a plan to ban zero-hour contracts and unpaid internships, Labour are proposing an increase in the living wage to £10 per hour by 2022. They will also be increasing the minimum wage into a living wage for all employees aged 18 or over, and want all employees - including temporary staff - to be able to access full employee rights from the very beginning of their employment. This will include doubling paid paternity leave to four weeks, and improving protection for working mothers.
The party also want to implement four new public holidays, in acknowledgement of the national patron saints’ days. But at the top of Labour’s list are the trade unions; with which the party want to reassert power, and reclaim their right to access workplaces and contribute to discussion between employers and employees. As well as increasing fairness at work, this policy aims to prevent businesses from undercutting staff pay with expat employment.
The Conservatives are after a similar result, which they will be aiming for by doubling the Immigration Skills Charge to £2000 per year, and increasing costs for small businesses that employ non-EU workers. However, they will also be offering a National Insurance holiday for businesses who employ ex-offenders, disabled people, and those with mental health issues; and increasing the National Living Wage to 60% of median earnings by 2020.
Like Labour, the Liberal Democrats are also proposing a boost in employee rights. They will also be aiming to eradicate zero-hour contracts, and encouraging a formal right to request a fixed contract instead. The party are also in support of maintaining certain rights guaranteed by European Union law, such as maternity law and the increase in paternity leave.
Business Finance and Growth
With a whole section of their manifesto dedicated to small businesses, the Liberal Democrats are proposing a new scheme to support entrepreneurs by paying them £100 a week for six months, and offering mentoring support as they grow. They also want to expand the activities of the government owned British Business Bank, encouraging them to tackle the shortage of equity capital for growing firms and to provide long-term capital for SMEs.
Labour promise to appoint a Digital Ambassador, who will liaise with technology companies ‘to provide support for start-ups to scale up’. The party also propose the mandate of a new National Investment Bank, and regional development banks directed specifically to meet small business’ needs and ‘prioritise lending to improve the funding gap’.
The Conservatives want to update the rules that govern mergers and company takeovers.
Both the Liberal Democrats and Labour propose a full review of business rates, and encourage that cutting them will be a priority. But the parties differ slightly when it comes to income tax.
The Lib Dems want to increase income tax by one penny in the pound, in attempt to reverse the Conservative cuts to corporation tax and capital gains.
Labour, on the other hand, propose an increase in income tax for those earning over £80,000 per year. They also want to increase corporation tax for larger businesses, and bring in a lower small profits rate of corporation tax for small businesses. However, they have said that they will make no increase on National Insurance or VAT.
The Conservatives, promising to ‘simplify’ the tax system, have also ruled out an increase in VAT. But they have left questions unanswered when it comes to the matter of National Insurance, which with a rise had been planned and subsequently scrapped.
Moving forward, the party have planned to increase the personal allowance for income tax to £12,500, and to raise the higher rate threshold to £50,000. And as for cuts, they will be sticking to their pledge to drop corporation tax set to 17% by 2020.
Check out our Guide to Small Business Taxes to find out more about the current tax legislation for 2017/18.
The Conservatives will be entering the Brexit negotiations with what they have stated as a ‘sincere spirit of cooperation’ to take the UK out of the EU and single market. They want free trade with Europe, and plan to replicate all existing EU free-trade agreements with other countries and to seek new agreements abroad.
On the other hand, the Liberal Democrats are choosing to remain in the single market – which is trade without restrictions or tariffs - and to propose holding another referendum on the negotiations struck with the EU.
Labour have said that ‘no deal’ will not be an option, and they plan to put jobs and the economy at the forefront of their negotiations.
Skills and Education
All three of the main parties are planning to develop the availability of a practical, yet business focused education.
The Conservatives propose the launch of new vocational qualifications, called T-Levels. These will cover a total of 15 subjects, including engineering, construction, and create and design. With this they want to establish new institutes of technology in every major city in England, and to deliver three million apprenticeships by 2020.
Labour are also pledging to boost apprenticeship figures, by aiming to double the number of completed apprenticeships at NVQ Level 3 by 2022, and providing funding to small businesses that hire apprentices.
Along similar lines, the Liberal Democrats will also be encouraging schools and apprenticeships to work closer with businesses. In fact, they want to double the number of businesses that hire apprentices, and to develop high-level vocational skills to be delivered through national colleges.
Both the Labour and the Conservative parties are calling out late payments.
Labour, calling ‘war’ on the matter, will demand that all bidders for government contracts pay their own suppliers within 30 days. And businesses that don’t comply with this policy, the Prompt Payment Code, will lose the right to bid for government contracts.
The Conservatives are also pledging to make 33% of their purchases from SMEs by the end of the next parliament.
You can find the full manifestos for each of the main parties below:
Don’t forget to vote on the 8th June 2017.