General election 2015: Which party means business?

In the run up to the election, we bring you the key business policies of each of the main political parties – which party will get the small business vote?

The Conservatives, Labour, Liberal Democrats, Green Party and UKIP are all vying to get your vote in the upcoming general election but just how do they plan to support start-ups and small businesses? Are the parties as pro-business as they make out?

With the recent leaders’ debates criticised for making little mention of enterprise, we’ve compiled a handy guide on each of the main party policies affecting small businesses such as taxes, regulation and access to funding.

In recent weeks, Conservatives and Labour have made their cases for UK enterprise – the Conservatives issued an open letter signed by over 100 business leaders including Anya Hindmarch MBE, which Labour responded to with an open letter backed by “working people” such as Wayne Hemingway MBE. Leading entrepreneurs have made their party pledges but which party gets the small business vote?

Read on to find out where each of the main political parties stands on small business issues and share your verdict on which party means business….

Taxes

 

Conservatives:

Will cut corporation tax to 20%, down 1% on the current rate, for businesses making profit in excess of £300,000. Corporation tax for companies with profit of less than £300,000 will remain at 20%. It will exempt new businesses from paying National Insurance on the first 10 employees for two years and will scrap National Insurance for those aged under 21 to make it easier for businesses “to give young people a start in life”. In the 2015 Budget report, George Osborne said the party would be changing Entrepreneurs’ Relief so that it will “only be available to those selling genuine shares in businesses” in order to negate tax avoidance.

 

Labour:

Has promised to keep Britain’s corporation tax rate the lowest in the G7 group of economies but there is headroom for increases after it voted against government plans to cut the rate from 21% to 20%. The Centre for Policy Studies think tank has suggested that an increase to 26% or 27% is likely. Labour has also said it will cut “and then freeze” business rates for 1.5 million small businesses.

 

Liberal Democrats:

Has said that it will “ensure our tax system stays competitive” and will make small and medium-sized businesses the priority for any business tax cuts. In its manifesto the LibDems say they will introduce a new supplementary tax on the banking sector.

 

Greens:

Will reduce corporation tax for small firms to 20%. Plans to simplify PAYE by aligning the lower National Insurance limit with the personal allowance and abolishing the upper limit. In the long run its goal is to merge National Insurance into income tax. It will also abolish Employers’ National Insurance with an increase in other business taxes to compensate.

 

UKIP:

Will cut business rates by 20% for companies that have premises with a total rateable Value of less than £50,000. Will set up a Treasury Commission to design a turnover tax to ensure big businesses pay a minimum floor rate of tax as a proportion of their UK turnover.

Funding

 

Conservatives:

Will expand on its current small business funding initiatives such as the British Business Bank and will retain the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) in order to encourage investors to back new businesses. It plans to extend the Funding for Lending Scheme, working with the Bank of England, to reduce the cost of lending to small and medium businesses.

 

Labour:

Will create a British Investment Bank to lend money to new and growing businesses which “will make it easier to start and grow a business”. All funds raised from the planned increase in the licence fees for the mobile phone spectrum – estimated to be up to £1bn in the next Parliament – will be allocated to the Bank.

 

Liberal Democrats:

Plans to develop the Regional Growth Fund and wants to achieve its goal of facilitating £16bn worth of private investment to businesses of all sizes and sectors.

 

Greens:

Will introduce a network of local community banks to provide a new source of finance for small businesses.

 

UKIP:

Has pledged to offer businesses easy access to business angels, Business Credit Unions, and access to peer-to-peer lending and crowdfunding providers. It will also press for reform of the retail banking sector.

Employment

 

Conservatives:

Will abolish the default retirement age and wants to “reinvigorate” occupational pensions and work with employers and industry to support auto-enrolment into pensions. It has outlined plans to build a network of business mentors and provide loans to would-be entrepreneurs, supporting self-employment and franchising as a route back into work. Plans to create three million new apprenticeships by 2020. Under a Conservative government nobody on the National Minimum Wage will pay income tax, the “tax-free minimum wage” as Cameron describes it. Rises in the minimum wage rather than inflation will also determine the level of income tax free personal allowance, which the Conservatives have pledged to increase to £12,500.

 

Labour:

Will abolish zero hour contracts and will introduce rules to give new rights to employees on zero-hours contracts. These rules will include the right for employees who have consistently worked regular hours for more than 12 weeks to receive a fixed-hours contract automatically. It will ban employers from requiring zero-hours workers to be available on the off-chance that they’ll be needed. Will also introduce ‘Make Work Pay’ contracts which will give a tax rebate to those companies that sign up to become Living Wage employers in the first year of the next Parliament. Publicly listed companies will be required to report whether or not they pay the Living Wage.

Plans to increase National Minimum Wage to £8 an hour by October 2019, in real terms broadly similar to today’s rate, and will increase fines for employers who fail to pay the minimum wage. Wants to introduce new technical degrees to give young people vocational skills and will increase the number of apprenticeships; it will ask all businesses bidding for major government procurement contracts to provide new apprenticeship opportunities and promises to give employers more control over apprenticeships funding and standards in return for an increase in the quality of roles created. Labour will also abolish the £1,200 fees for employment tribunal claimants, which it describes as a “significant barrier to workplace justice”.

 

Liberal Democrats:

Plans to double the number of employers with apprentices in the next Parliament with a target of getting four million new apprentices into the workplace. Will increase National Minimum Wage to £6.70 in October 2015 and plans to increase the National Minimum Wage for apprentices by 20% – up 57p an hour from £2.73 to £3.30 from October 2015; would mark the largest ever increase in the National Minimum Wage for apprentices.

 

Greens:

Wants to increase the National Minimum Wage to £10 an hour by 2020.

 

UKIP:

Believes businesses should be able to discriminate in favour of young British workers. Wants to introduce a blanket ban on exclusivity clauses in zero hours contracts with the provision that small business employers will not have to grant a zero hours contracts worker a transfer to a fixed hours contract or permanent post. Will introduce an option for students to take an apprenticeship qualification instead of four non-core GSCEs which can be continued at A-Level.

Regulation

 

Conservatives:

Annual tax returns to be abolished by 2020 with the information HMRC needs automatically uploaded into new digital tax accounts. Wants to reduce the burden of red tape on businesses with a ‘one in one out’ rule for new regulations, mandatory sunset clauses and regulatory budgets for departments. Will look to open up government procurement to small and medium-sized businesses with a goal for 25% of government contracts to go to small firms. Business minister Matt Hancock recently announced that it will be making changes to the Prompt Payment Code to tackle late payment practices. The new Code will promote 30 day terms as standard with a 60 day maximum limit.

 

Labour:

Plans to tackle late payments with a new requirement for larger businesses to share details of any late payments they have been responsible for and information on how they have compensated suppliers. Will give organisations such as the Federation of Small Businesses (FSB) the right to take on late payment cases on behalf of their members. Will create a Small Business Administration (SBA) body to co-ordinate activities to benefit small businesses and “cut unnecessary regulation”. Shadow business secretary Chuka Umunna has said the SBA will “ensure requirements on small business are designed through the lens of the smaller firm”. The party will also freeze energy bills until 2017 in response to the cost concerns of “many businesses”. “We will protect small businesses by ending unfair contracts and automatic rollovers to more expensive tariffs,” its manifesto states.

 

Liberal Democrats:

Will push for a third of government contracts  to go to small and medium businesses – it estimates that this will amount to over £15bn worth of central government contracts reserved for small businesses.

 

Greens:

Will look to establish “greater community and environmental accountability”. It will require all companies to ensure pensions for all workers.

 

UKIP:

Will repeal the Temporary Agency Workers Directive; the law which seeks to guarantee those working through employment agencies equal pay with employees in the same business who do the same work. Wants to simplify planning regulations and licences for empty commercial properties vacant for a year. Will extend the right of appeal for micro-businesses against HMRC action.

Equality and women in business

 

Conservatives:

Will extend childcare promising 30 hours of free childcare a week for three to four-year-olds, which it says could save parents £5,000 a year.

 

Labour:

Will extend childcare to give parents 25 hours of free childcare a week for three to four year-olds and plans to extend school hours to 8am to 6pm to help working parents. Plans to double the length of time fathers would be allowed to take paid paternity leave to four weeks – critics have said this move could act as a “tax on business”.

 

Liberal Democrats:

Will provide 15 hours of free childcare per week for two year-olds and 15 hours free childcare per week for three to four year-olds. Will expand shared parental leave with a “use it or lose it” month for fathers.

 

Greens:

Will require 40% of board members of larger companies to be female within five years.

 

UKIP:

Will offer “full support” for current maternity and paternity rights. Will take “lowest-paid” women out of tax such as women who work part-time. Has said it will look to reduce the cost of childcare but has yet to issue any official plans on this.

Infrastructure

 

Conservatives:

Will build the high-speed rail line two (HS2) connecting London, Heathrow, Birmingham, Manchester and Leeds with the Continent through the Channel Tunnel, with construction to begin in 2015. It will invest up to £600m in mobile networks and faster broadband speeds with ultrafast broadband, of a minimum 100 megabits per second, to be made available to “almost all” UK premises. In the 2015 Budget Report, the chancellor said that up to £140m will be invested into infrastructure and “cities of the future”.

 

Labour:

Will continue to support construction of HS2. Plans to invest in low carbon technologies with a 2030 electricity decarbonisation target. Will set up a National Infrastructure Commission to plan for “Britain’s long term infrastructure needs”.

 

Liberal Democrats:

Plans to support HS2 – Nick Clegg has said the project will “bring hundreds of thousands of jobs to the North West” and will help address “the North-South” divide.

 

Greens:

Opposed to the HS2 project; the party has said it will bring “too much damage to local communities and the environment, and is too pricey”. Wants to re-nationalise the railways.

 

UKIP:

Will scrap the HS2 project as it says it is “uneconomical and unjustified”. For independent retailers it will encourage councils to provide more free parking for the high street.

Talent and the EU

 

Conservatives:

Will introduce a citizen test with “British values at its heart”. Will only “welcome those who want to work hard and contribute to society”. Has said that it will run an EU referendum to “remove uncertainty”.

 

Labour:

Will introduce a “smarter system of controls” to attract talent and investment while controlling low skilled migration. People working in public services in public facing roles will be required to speak English. Labour will keep the UK in a “reformed” EU and has “no plans” for an EU referendum.

 

Liberal Democrats:

Will introduce exit checks to keep track of who is leaving the country and identify people who are overstaying their visa. In-work benefits will only be paid to those migrants working the equivalent of 35 hours per week on minimum wage. Wants Britain to remain in the EU. It also plans to scrap online barriers to make it easier for British firms to sell their products to customers across the EU – it will turn 28 different sets of national rules into one “digital single market”.

 

Greens:

Has stated that foreign nationals with “resources or desirable skills” will not be given preferential treatment. Migration policy will not “discriminate directly on grounds of race, colour, religion, political belief, disability, sex or sexual orientation”. Yet to officially announce its position on EU but has previously backed plans to hold a referendum.

 

UKIP:

Will take the UK out of the EU. Work permits will be permitted to fill skills gaps in the UK jobs market. The party has asserted that those coming to work in the UK must have a job to go to, must speak English, must have accommodation agreed prior to their arrival, and must have NHS-approved health insurance. Migrants will only be eligible for benefits and access to the NHS (in work or out of work) when they have been paying tax and National Insurance for five years and will only be eligible for permanent residence after 10 years. Will cap the number of skilled workers to the UK to 50,000 each year.


Which party is best for business? We’d love to hear your thoughts so please tweet us using the Twitter handle @startupstowers

You can read more about the small business policies of the main political parties here

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