For those who are registered to vote in the upcoming general election, (December 12), there’s certainly a lot to think about, why? Because both the Conservative and Labour parties have recently released their manifestos.
Considering factors like Brexit uncertainty, UK businesses are no doubt keen to see clear sets of proposals established in these documents that will steer the country’s economy into 2020 and beyond.
What are the two main parties promising them?
Slogan: “Get Brexit Done/ Unleash Britain’s Potential”
Manifesto: 59 pages
- A promise to ‘Brexit’ by 2020
- A pledge not to raise income tax, national insurance or VAT
- Free childcare to parents of three/four-year-olds during school holidays
- “Millions” to be invested in apprenticeships and infrastructure
- Reach Net-Zero (emissions) by 2050
- Clean energy solutions and green infrastructure investment
- Increase the Employment Allowance for small businesses
- Reduce business rates
- Expand startup loans
- Corporation tax to stand at the current rate (19%)
Slogan: “It’s Time For Real Change”
Manifesto: 107 pages
- Hold a second referendum on Brexit (change the deal or remain)
- Raise the minimum wage from £8.21 to £10 in the next 12 months
- Net-Zero (emissions) target and full-fibre broadband by 2030
- Creation of 1m new jobs in the green economy
- New levy on multinationals
- Curtail tax breaks for companies involved in R&D
- A more “flexible” Apprenticeship Levy (wider range of accredited trading)
- Scrap Entrepreneur’s Relief
- Corporation Tax not to rise above the 2010 rate
- Tackle late payments for small businesses
While some may applaud Johnston’s mission to “Get Brexit Done,” it might concern British SMEs involved in the export economy, (9.8% of all UK SMEs).
While this sector has grown impressively over the past few years, a swift Brexit in 2020 could mean these businesses may not be able to prepare as adequately as they might like.
Labour’s approach towards Brexit may appeal to more businesses. Yet while referendum statistics showed that senior executives at big UK businesses such as Vodafone were highly motivated to ‘remain’ within the EU (93%), smaller business owners had mixed feelings (47%), with many citing “unnecessary” EU regulations as the reason why.
Johnston’s plans to transition and invest in a green economy, including reaching ‘zero missions by 2050’ will probably be welcomed by environmentally aware businesses.
In fact, the UK’s low carbon environmental goods and services (LCEGS) market is the sixth-largest in the world and is worth £112bn.
What’s more, small businesses make up a majority of this sector at 91.5%.
However, Labour is also promising to ‘go green’, bringing their goal forward to the 2030s. Calling it their ‘Green Industrial Revolution,’ Labour claims it will create 1m new jobs in the sector.
Apprenticeships, pay and childcare
Conservative investment in apprenticeships could help fledgeling businesses grow and help upskill young people, or those seeking a change in career.
Their “free childcare” policy could also encourage parents to re-enter work.
While Labour’s raising of the minimum wage in a short space of time is good news for employees, the costs will be met by employers, raising the question, will smaller businesses be able to afford it?
Daniel Foster, Managing Director, Steamhaus: For Labour
“The Conservatives are traditionally seen as the party that rewards those that ‘do well,’ including business owners like myself. But at what cost to the teams we employ and the communities we’re part of? Its focus on skills and research should be a positive but, for me, it lacks substance. Having a ‘pro-enterprise vision’ doesn’t necessarily mean ‘pro-people’. Labour’s manifesto is more aligned with looking after those who actually do the work. As well as the social and moral connotations, improved rights mean a more engaged, productive workforce. This is crucial to developments in industries such as technology and science.”
1. Chris Vincent, Managing Director of V4 Wood Flooring: For the Conservatives
“Boris Johnson’s mantra of ‘get Brexit done’ is exactly what I have been saying for a long time now and the one thing that I believe will kickstart the economy and business investment. The Conservative manifesto was conservative in content, with no big, eye-catching announcements that need to be paid for one way or another and that gives me confidence in a conservative government that will understand business, entrepreneurship, innovation and self-employment and its importance to the country and our economy.”
2. Dominic Lusardi, Managing Director, Animmersion: Both fall flat
“Both parties have failed to grasp the fact that the digital and data sectors are quickly becoming a cornerstone of the economy and SME firms in this space are the fast-growth businesses the country needs. Digital is integral to every industry and the creativity and innovation that is taking place in tech. SMEs have to be better supported as they are without a doubt the future of the economy. Providing superfast fibre broadband, whether it is nationalised or not, is one thing, but more has to be done to encourage investment from both big tech firms and innovative SMEs while exploiting the potential of advancements such as 5G.”
3. Mike Hampson, CEO, Bishopsgate Financial: Labour’s alienating business
“The Labour party seems intent on alienating the business community, particularly the small firms that have been creating many of the jobs recently. Labour has no comprehension of the lengths business owners go to keep the lights on and people in jobs. This includes re-mortgaging their homes and risking everything in order to start and run a business. Labour’s tax plans will inevitably lead to less investment, job losses, and business moving abroad.”
4. Dave Chaplin, CEO, ContractorCalculator: Are the Conservatives really pro-enterprise?
“The politicians have been heavily lobbied by thousands of contractors as part of the Stop The Off-Payroll Tax campaign, together with representations made by relevant trade bodies for freelancers and businesses of all sizes. And the result? Zilch. All fell on deaf ears. We are witnessing considerable damage to the financial services sector as contractors are terminated and work moved offshore. The Off-Payroll Tax is turning out to be what everyone expected – damaging to the valuable UK flexible workforce. It’s even more disturbing that the Conservatives are still purporting to be the party of business and the self-employed on the one hand, yet hitting them with a massive new tax with the other.”
5. Steven Drew, Product Manager for Informi: Labour’s policies have potential, but are they enough?
“It’s vital that Britain’s 5.7 million-strong small business community is given more support when it comes to spending the Apprenticeship Levy in the best fashion. Training and developing our workforce is the obvious solution to closing the skills gap. Levy funding clearly needs reviewing, however, as there’s reportedly little left in the central fund, and it’s also unclear how the Labour Party intends to enact its proposal for six years of free study for adults. We believe it’s promising that Labour has underlined its commitment to tackling the scourge of late payments. And the scrapping of Entrepreneurs Relief will be welcomed, as the relief in its current form is failing to help small businesses grow and prosper.”