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What Does the General Election Mean For Small Businesses?
by Startacus Admin
The Election is fast approaching and with less than 2 weeks to go until crunch time, it seems to be all that people are talking about - not that we can blame them.
The run up to an election is always a very exciting and anxious time. Big changes could be on the horizon and everyone can’t help but anticipate what is to come!
However beneath all the hustle and bustle of election time, there are a lot of policies tucked away which may affect small businesses across the UK, so we thought that we’d jump on the bandwagon and discuss just that. Perhaps if you’re undecided we can help you make up your mind?
According to the FSB’s manifesto, a staggering 99% of businesses across the UK are made up of small, micro businesses. With that in mind then, regardless of the outcome on May 7th, from here on out it would be quite refreshing and beneficial if the government supported small businesses in a way that will allow them to grow and grow.
A lot of the policies proposed by all parties, including Labour and the Lib Dems, are particularly concerned with employment and ensuring that absolutely everyone has the same opportunities. For example, Labour intends to increase minimum wage to £8 per hour by the year 2020. According to their manifesto “Britain will only succeed when working people succeed”. Ed Miliband wants to “build an economy that works for working families, hard work is rewarded and we all have the opportunity to share the prosperity of our country.”
Budding entrepreneurs and small businesses seem to be something that Labour wants to address should they get the chance as they have specifically outlined what they plan to do in their manifesto. One of the biggest struggles for small businesses across the nation is ever present business costs. At the moment, they are particularly high and in a lot of ways act as a roadblock for small businesses. More and more people are turning to self employment and entrepreneurialism, but of course a lot of individuals don’t have the finances to both start their own business and worry about how much it will cost to get off of the ground. It is a contradiction and definitely acts as a deterrent for those who perhaps want to try it on their own. This is where a handful of Labour’s policies come in…
Firstly, along with Lib Dems, they want to create a million new jobs for everyone who has the right grades when they leave public education at the age of 18. They will ensure that these grades are met by introducing thousands of apprenticeships for young people while also making sure that it is compulsory for young people to learn both Maths and English up until they leave school. As well as this, they want to cut business rates and freeze them for around 15 million small businesses across the country. They also want to freeze their energy bills and set up a British Investment Bank that will be able to lend out money to small and micro businesses in need of it.
It would seem that the economy and small businesses are a great concern for the Labour party and they have outlined a lot of policies that they would be put in place in order to help the business world. We’ll have to wait until May 7th to see whether these policies are implemented and if they are, whether they will pay off.
Of course, the Labour party aren’t the only ones who are concerned about small businesses and entrepreneurs. While Labour wants to freeze business rates entirely, the Green Party are taking a different approach. According to their manifesto“small businesses are the backbone of our economy and create the most jobs”. Similar to Labour, they want to ensure that the reduced tax rates for small businesses stay in place and that they have access to funding from locally owned community banks. They also want to impose extra business rates for out-of-town businesses and bigger chains in order to help fund small businesses and help them stay afloat.
As well as this, they want to encourage the use of local currencies to empower smaller companies so that they can compete with larger multinational companies. This would mean that local companies could also pay their council tax with local currencies and therefore strengthen local trade.
Again, the aim is to reduce the financial stress of starting your own business while making sure that it is possible for individuals to keep their businesses running effectively.
The Lib Dems also understand that Britain needs a highly skilled workforce to promote balance and they want to ensure that there is equal opportunity for everyone. This of course includes small businesses. All of their policies have been outlined appropriately in their manifesto.
Since the beginning of the month, the coalition has doubled rate relief for these businesses and it will remain this way until March 31st 2016. This will hopefully provide appropriate support for around 575,000 of small businesses across the UK. As well as this, according to their manifesto, around 385,000 won’t have to pay any tax at all.
According to Chief Secretary at the Treasury, the Lib Dems know that business rates are a “considerable cost” and their aim is to fix this entirely.
They also want to introduce a Regulation Advisory Board. The aim is to “remove unnecessary business regulation”, according to their pre-manifesto back in January. They understand that regulation is needed for smooth sailing but they believe that it ultimately inhibits business innovation. In addition, they give an £800 tax cut to those earning a low and middle ground income. This will let workers earn 10,500 tax free. They will also continue to reinforce Entrepreneurs’ Relief; an allowance that can be claimed by entrepreneurs who are selling their business, and ensure that it is only there to help genuine entrepreneurs.
Of course, it is important that we also talk about what the Conservatives have promised us should they be kept in office. According to their manifesto they “will reward your entrepreneurship”. They do not agree with Labour’s plan to introduce corporation tax. They do not plan to review business rates until later this year, but like the Lib Dems they want to take a look at regulation and ensure that it isn’t having a knock on effect on the economy. Along with Ukip, they also wish to place a referendum on Europe, which unfortunately might affect trading.
In addition, all parties aim to control immigration. For example, the Conservativesonly want to grant visas to those who have the skills needed to help Britain’s economy grow. However, the coalition has made an effort to make a few exceptions for those who can benefit small businesses, particularly anyone who is tech savvy.
It is evident that the economy, small businesses and creating as much opportunity as possible seems to be at the heart of a lot of these policies. However, what exactly will happen and what is put forward remains to be seen.
With the election fast approaching, on May 7th we will finally find out who will be in office and which of the changes discussed above will be implemented.
We’re very excited to find out the outcome and we hope you are too. If you haven’t decided exactly who you’re voting for, we hope that we’ve helped you decide. If you have however, we hope you’ve enjoyed reading! Don’t forget to let us know what you think about the upcoming election and the policies that have been put forward by all parties!
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