For the second time in two years the electorate is being asked to decide the shape of Government. While some think Theresa May is lacklustre and grey, she certainly knows how to put a cat among the pigeons. So what are the policies put forward by the three major parties that will affect small businesses in the UK? Here, retail expert Adam Bernstein spells out what each party is proposing
On SME finance, Liberal Democrat policy would help businesses access capital. On corporate governance, policy would give shareholders a greater voice in terms of executive remuneration. The party would also level the tax playing field, so that multinationals follow the same rules as smaller organisations. It would investigate a “fairer and more equitable” means of taxing small businesses, while reviewing the operation of business rates – to allow for the internet economy – and may bring in a health tax to aid the NHS.
The party is concerned with the Government’s stance on Brexit. So, on leaving the EU, the Libdems would increase funding from the British Business Bank and would work to protect UK intellectual property rights in Europe.
They are bothered by the changing the nature of employment and would train individuals to cope with, and exploit, new technologies. They want a skills strategy involving education from school to university, a new T-Level, and an expansion of the Apprenticeship Levy. They support a review of employment rights, as the lines between employment and self-employment have been blurred.
Infrastructure is a key part of policy and Libdems want greater access to fast broadband by 2020. Party policy also seeks resilience in energy supply as well as a detailed National Grid roadmap.
The Libdems do see a need to boost the regions, would further encourage local authorities and Local Enterprise Partnerships to work together, and would devolve control over funding to the regions.
They consider it desirable that firms above an undefined size threshold should give employees the right to request a share in a company and board representation. They would also like firms to consider employee welfare, environmental standards and ethical practice, while encouraging increased worker representation for diverse groups.
Being the party of Government means that Conservative policies are more readily discernable.
On taxation, the March budget confirmed the plan to increase the personal allowance to £12,500 by 2020 and raise the higher rate tax threshold to £50,000 by 2020. Corporation tax fell in April to 19% and is on track to fall to 17% by 2020. However, the present Government, still wants the new reporting regime – Making Tax Digital – even though it and countless other changes have been dropped from the Finance Bill as the current Parliamentary session is discontinued. It’s interesting that the Chancellor and Theresa May have pulled back a little from the suggestion that they may have to increase taxation in the next Parliament.
The Conservatives are concerned about the rise of the “gig” economy and its first step to combat the loss of tax revenue came in April 2016 as dividends above £5,000 were to be taxed separately. That allowance was lowered in the March budget to £2,000. The U-turn over National Insurance increases may be temporary – the Autumn Statement could see some revision.
On business rates, the Government offered some respite to hard-pressed ratepayers. However, it made no mention of any plans to revisit the subject.
The triple-lock on pension increases that were given to win over the anti-Brexit arm of the Conservative Party is said to be under threat. Also considered vulnerable are election pledges made by former Prime Minister David Cameron.
Teresa May’s speech to the last party conference noted that companies that behave badly (in terms of employment, training and fighting terrorism) are “on warning”. She wants workers represented on company boards and said that they will have employment rights protected and enhanced. The speech made great play on role of apprenticeships.
A recent blog on the party’s website said that the Conservatives still want to cut public spending, enhance consumer rights, and tackle multinational abuse of the tax system.
Labour lists 10 main policies on its website. Those relevant here include a £500 billion investment in infrastructure; making businesses with more than 21 staff publish pay audits; two million new skilled manufacturing jobs; a “full” living wage; the reintroduction of a 50p top rate of income tax for earnings over £150,000; and the reversal of cuts to corporation tax.
A Labour government would borrow to invest in housing, energy, transport and digital projects. It thinks that the railways should be nationalised and opposes HS2. It’s also planning to take “big steps” to tackle the housing crisis with the concomitant economic benefits to builders and those supplying both them and homeowners.
On Brexit, a second referendum will not be held, and on wealth, the party wants to increase taxes on the “rich” – the defining income is in the region of £70,000 to £80,000. The party also supports a maximum earnings cap.
The party’s National Policy Forum Report 2016, suggests a Fiscal Credibility Rule that in normal times commits Labour to set out a plan to eliminate a spending deficit “on a forward-looking, five-year rolling timescale.” There’s also to be a Tax Transparency and Enforcement Programme, to tackle the problem of tax evasion and aggressive tax avoidance.
The document notes the current skills shortage and that British workers need help to retrain. Also reported is Labour’s desire to improve infrastructure of all types, specifically the country’s digital infrastructure.
Security of employment and additional rights may be extended to those workers not in traditional employment contracts. Labour also wants a greater role for the workforce in corporate management and “local productive relationships between local government and businesses, supported by a national strategy” with a view to boosting the regions.
Lastly, Labour will, through a National Investment Bank, tackle perceived institutional weaknesses and a lack of competition in banking and financial system. And moves would be made to remove a disincentive on investment and innovation in plant and equipment.