One of the things that our clients are asking is what they can expect from the new government. One of the good things about a majority government is that the we do not need to wait for the results of coalition agreements to know what to expect and can instead look to see what the Conservatives promised in their manifestos (assuming of course that they deliver on their promises).
Their main manifesto commitments for SMEs were as follows:
Red Tape
The Conservatives have promised to continue with the one-in-one-out policy whereby, for every new regulation, an existing one will be abolished, and mandatory sunset clauses, coupled with a promise to cut £10 billion from business red tape in the next five years.
In addition, they have promised to reduce the number of forms needed to register a new company to make the process much quicker.
Employment
The government has promised to abolish the default retirement age and to reinvigorate occupational pensions.
It has pledged to give SMEs a £2,000 bonus for every apprentice they hire with the aim to deliver 3,000 new apprenticeships over the lifetime of the next government.
It has promised to review the disadvantages faced by the self-employed including accessing maternity pay and building up pensions, to build a network of business mentors and to provide loans to would-be entrepreneurs.
It has also said it will extend the right to request flexible working to everyone and to allow parents to share maternity leave between them.
Tax Policy
The Conservatives say that they will keep the Employment Allowance until 2020 so that one-third of employers pay no Employers’ National Insurance and will increase the level for the Annual Investment Allowance.
They will cut the main rate of corporation tax to 20% for small companies and remove complicated tax reliefs.
They will make small business rate relief automatic and undertake a major business rates review.
Finance
They will use government guarantees to help create new sources of finance for SMEs and will treble the number of start-up loans to 75,000.
Infrastructure Investment
The Conservatives have pledged to invest £100 billion in infrastructure during the life of the next Parliament with £38 billion being spent on improving the railway network and £15 billion being spent on road investment.
They will extend the time to apply for grants of up to £3,000 to businesses to improve their broadband connection to March 2016 in 28 cities and secure the delivery of superfast broadband to provide 95% coverage in the UK by the end of 2017.
They say they will also work with mobile operators to ensure that 90% of the UK will have coverage by the end of 2017 and to ensure that Britain becomes a world leader in 5G technology.
They also say they will look at other measures to help build a “Northern powerhouse” particularly in Manchester and Leeds.
Late Payment
The government has promised to tighten up the prompt payment code in order to reduce late payments and to introduce a Small Business Conciliation service to mediate in disputes especially about late payment.
Exporting
They say they will boost support for first-time exporters and have a goal of £1 trillion in exports.
SME Contracts
They have pledged to reduce administrative requirements for government procurement and have created a target that one-third of government contracts will go to SMEs.
The EU
The government has promised an in-out referendum following attempts at renegotiating the UK’s terms of membership of the EU although this is something that is not particularly welcomed by businesses who fear that an exit from the EU would make it harder and more expensive to access the European markets as well as lead to upheaval.
Gary Cousins
Business Solicitor