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Election 2010: Business policies

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4th May 2010
Editorial team AccountingWEB.co.uk
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Business: Where they stand

Labour
-Business rates cut for one year from October.
-Double Entrepreneur's Relief.
-Increase small business rate relief.
-Time To Pay extended
-Small business credit adjudicator established to improve access to finance.
-Plan to cut regulation costs by £6.5bn by 2015.

Conservative
-Stop 2011 NIC increases
-NIC amnesty for first 10 employees a company hires in its first year
-Review small business tax (including IR35)
-Create Local Economic Partnerships
-Improve R&D tax credits
-Make small business rate relief automatic
-Reduce red tape for SMEs with 'one in one out' regulation rule.

Liberal Democrats
-Stop unfair bank and energy charges.
-More apprenticeships and university places.
-Make access to finance for regional businesses easier.

Green Party
-£2.5bn People's Bank to support green start-ups
-Set NMW at 60% of average earnings (approx £8.10/hr)
-Replace unified business rate with tax on land values
-End tax relief on pension contributions

UK Independence Party
-Phase out employers’ NI contributions
-Save £120bn a year by leaving the EU
-Abolish EU carbon capping, emissions trading and landfill tax schemes
-Amend Takeover Code to stop foreign interests acquiring strategic UK firms

Helping businesses through the recovery has been listed as a priority by all the major parties. This article covers the key business issues raised in the campaign.

BCC calls for red tape review
4 May - In a pre-election statement, the British Chambers of Commerce issued a 12-point plan for growth, which included a call to drop Labour’s NI rate increase, a moratorium on new employment law and a systematic review of business regulations.

Failure to implement the 90-day plan "will mean a slower, or even non-existent, recovery", the organisation said.  “During the first 90 days after an election, an incoming government must make concrete proposals to reduce red tape and tax burdens on business; review how to move the economy away from an over-reliance on consumption and the public sector; and commit to improving Britain’s energy, transport and digital infrastructure,” said BCC director general David Frost. More details from BusinessZone.co.uk

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Tories target Business Links
13 Apr
- The Conservative manifesto laid out plans to replace the current system of Regional Development Agencies (RDAs) that supervise regional Business Link services with new ‘business led enterprise partnerships’ run by local councils and businesses. BusinessZone reports that shadow business secretary Mark Prisk criticised regional Business Links in February for “failing in their task”. The new enterprise agency network would be financed by councils and chambers of commerce, with matching funds from the government.

* * *

Business chiefs petition against NIC increase
8 April - Business leaders are backing Conservative proposals to reverse the government's planned National Insurance increase. A total of 68 business leaders who employ almost one million people have now supported the Tories in opposing what the party calls a "tax on jobs". Labour intends to increase NI by 1% for anyone earning less than £45,400 a year. Among the supporters are Nick Robertson, the entrepreneur behind successful online clothes retailer ASOS; House of Fraser chief executive John King and Tim Steiner, the boss of Ocado.

BUSINESS POLICIES - WHERE THE PARTIES STAND

Labour

  • Reducing the deficit will come from a combination of tax, public spending cuts and economic growth. Taking these steps to cut the deficit in a fair way with 60% of tax rises being paid for by the top 5% of earners.
  • Will cut business rates for one year from October.
  • Double the annual investment tax allowance to £100,000.
  • Double the value of capital gains that can be made under Entrepreneur’s Relief, meaning gains under £2 million are subject to Capital Gains Tax at the lower rate of 10%.
  • Temporarily increase the level of small business rate relief, so eligible small businesses occupying properties with rateable values up to £6,000 will pay no business rates for one year from October 2010.
  • Business Payment Support Scheme (aka “Time To Pay”) to be extended through the next parliamanet.
  • Widen sources of finance available to growing businesses by extending the Enterprise Finance Guarantee Scheme until March 2011; an extra £500m of additional bank lending will be made available to SMEs.
  • Provide guarantees on £41m of loans to businesses from major banks until March 2011.
  • New small business credit adjudicator will ensure small businesses are fairly treated when applying for loans.
  • £2bn Future Jobs Fund will create 200,000 jobs, of which at least 120,000 will be targeted at 18-24 year olds and 50,000 jobs will be targeted at unemployment hotspots.
  • Will invest in low carbon, biotechnology, advanced bioscience industries and cutting edge advanced manufacturing.
  • Will give earlier support to help unemployed people overcome the barriers to self employment. From early 2010, access to the Self-Employment Credit and to the provision of intensive advice and support will be available from week 13 of a Jobseeker’s Allowance (JSA) claim. 'Be the Boss' enterprise scheme will assist returning service personnel who wish to set up their own business by providing loans and grants.
  • Labour has announced a new goal to cut the cost of regulation by a further £6.5bn by 2015 - £1.5bn in unnecessary paperwork and record-keeping, and £5bn in the wider regulatory costs that impact upon business. Measures include:
  1. Developing a single online process for incorporating and registering a company, aiming for delivery in April 2011.
  2. New digital facilities at the Land Registry to enable businesses to submit and receive registration details electronically, aimed at making it quicker and easier for businesses to register commercial property.

Conservative

  • Will deal with the deficit more quickly than Labour and build a more stable, balanced economy, reform public services to deliver better value for money and create new jobs to “make Britain open for business again”.
  • Will stop the planned increases in National Insurance Contributions. Stopping Labour's “tax rise on jobs” will benefit 7 out of 10 working people and be funded by spending £6bn less in 2010-11 than Labour projections.
  • Undertake a full and fundamental review of small business taxation, including IR35. The aim will be to provide a simpler, clearer and lasting tax regime, so businesses can plan with confidence. “For the last 13 years, Labour have constantly meddled with the tax rules for freelancers and self-employed. IR35 has especially proved to over-complex, uncertain and often unfair,” said shadow business minister Mark Prisk. The Tories claim IR35 has cost business £73m over 10 years, but has barely raised any revenue. Prisk criticised Gordon Brown for making it harder to be self-employed at a time when Britain should be open for business.
  • Will reform regional business support to create business-led Local Economic Partnerships that will be more responsive to local business needs.
  • Supporting new business: Any new business started in the first two years of a Conservative government will pay no Employer National Insurance on the first ten employees it hires during its first year. Will also:
  1. Build a network of business mentors and provide loans to would-be entrepreneurs, supporting self-employment and franchising as a route back into work.
  2. Reduce the number of forms needed to register a new business - moving towards a 'one-click' registration model - with the aim of making Britain the fastest place in the world to start a business.
  3. End restrictions on people starting a business in social housing, to enable social tenants to become entrepreneurs.
  • Helping small businesses: Will reduce the burden of red tape on business with a 'one in one out' rule for new regulations, mandatory sunset clauses and regulatory budgets for departments. Will also:
  1. Open up government procurement to small and medium-sized businesses by reducing administrative requirements, with an ambition that 25% of government contracts go to SMEs.
  2. Use government guarantees to create more diverse sources of affordable credit for SMEs, building on our proposals for a big, bold and simple National Loan Guarantee Scheme.
  • Will re-establish clear national policy leadership for key sectors such as aerospace, pharmaceuticals, IT, the creative industries, high value manufacturing and hi tech engineering that generate high-quality jobs around the whole country.
  • As part of its public sector efficiencies and reforms, the Conservatives vowed to improve financial discipline by introducing a fiduciary obligation to taxpayers in civil service employment contracts. It will also strengthen the role of finance directors within government and implement clear financial performance targets for senior civil servants. The Treasury will return to its core role of ensuring value for money for taxpayers.

Liberal Democrats

  • Will consult with businesses to identify regulations for repeal, reduction or simplification.
  • End gold-plating of European Directives. Will ensure independent checks are carried out on the costs and benefits of new legislation and introduce sunset clauses so that regulations are time limited.
  • Will put a stop to unfair bank charges and make sure energy companies charge people fairly so those who use the least pay the least.
  • Will introduce Local Enterprise Funds to ensure businesses in every part of the country get a fair chance to grow - not just those in London. Regional Stock Exchanges will also be introduced to offer smaller businesses access to equity without the huge risks and costs of a London listing.
  • Will split the post office network from Royal Mail so they operate as two separate organisations; 49% of the shares in Royal Mail will be sold and capital raised will be invested in the postal network for branch modernisation, and to build new services. Royal Mail workers will get a stake by splitting the remaining 51% between a staff trust and the government.
  • Will increase the number of apprenticeships, and places on university and vocational higher education courses so young people can improve their skills and get qualifications that will help them capitalise when the job market recovers.

Green Party

  • Set up a People's Bank with initial funding of £2.5bn to assist a community-based network to support green start-ups and small, rural businesses.
  • Wants National Minimum Wage to be 60% of net national average earnings (this would mean a minimum wage of £8.10 per hour at current rates). 
  • Replace the unified business rate by a tax on land values paid to the local authority rather than central government
  • Proposes a £44bn package of measures investing in renewables, public transport, insulation, social housing and waste management; £5bn would be invested in 350,000 workforce training places for jobs in energy conservation and renewable energy, with grant-funded conversion courses for skilled engineers from other industries.
  • Help small businesses cope with regulation
  • Introduce legislation to outlaw late payment
  • Ensure that occupational pension schemes are organised for and by the workers and pensioners concerned instead of being used primarily to make money for banks and insurance companies. End tax relief on contributions that mainly benefit the more wealthy would simply the system.

UK Independence Party

  • Phase out employers’ NI contributions over five years
  • Save up to £120bn a year by leaving the EU. No British jobs or trade will be lost
  • Axe Britain’s gigantic quango mountain and public sector non-jobs to reduce UK national debt
  • Release businesses from 120,000 EU laws
  • Create one million new skilled jobs with public and private investment in a public works programme to provide defence equipment, nuclear power stations, flood and coastal protection, transport infrastructure including high-speed rail lines, and new prisons
  • Abolish EU carbon capping, emissions trading and landfill tax schemes
  • Amend the UK Takeover Code to prevent foreign interests from gaining control of strategic British companies.
     

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By Rodjun
15th Apr 2010 04:49

election

Whenever there is an election business tycoons are very much vigilant on what  the election  is going to be, because the success and economic growth highly depend on the elected officials,   with regards to their economic plan and investment opportunities that they are going to establish. Other than that  those leaders should also  have the idea of what it takes to be  economically stable. Kentucky Fried Chicken must be demolished. I think in the pursuit of this "low carb" business some people have gone completely too far with the meat sandwich idea (sans buns) and have used it as the impetus for some serious evil. Seriously – the KFC Double Down  is ridiculous. Sandwiching bacon and cheese between two fried (or grilled) chicken patties is just grosse. Each time a person thinks about purchasing that, another cardiologist knows he'll never need payday loans. You basically are buying a doctor a new Mercedes and renewing his country club membership when you eat something like that.

 

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