Today the doors of parliament opened and welcomed in a majority Conservative government. Over the last few weeks I’ve been reflecting on what the new Tory government really means for the small businesses we serve.
Overall I think there’s a lot to be positive about as a business owner, from more opportunity to bid for government contracts to strengthening the prompt payment code but, as a number of our clients have pointed out, there are gaps. During the election campaign I took the time to read all the manifestos, and I think the government can plug these gaps by ‘borrowing’ policies from the opposition.
Small business matters
Every major party recognised that the small business community was a powerful force for employment and economic good. The Conservatives have pledged to increase the number of start-ups to 600,000 a year by 2020 – a worthy move. However, as someone who has gone through the pain barrier of establishing and growing a business, and as a provider of support to people doing the same, it’s one thing to say you’ll help people start-up, it’s quite another to say you’ll help them stay in business.
Rates and red tape
That’s why manifesto commitments such as cutting regulatory red tape, increasing the personal tax allowances, freezing VAT and reducing National Insurance bills mustn’t be reneged. And nor must the review into business rates – Labour said it would freeze or even cut rates, a move that would be welcomed by small businesses operating on the high street.
The SNP put forward the notion to increase the National Insurance Employment Allowance from £2,000 to £6,000. Many of our fledgling clients would benefit from such a break, expediting the creation of additional jobs.
Runways, railways and super-highways
Another hot point for clients was infrastructure. Connecting the major cities and opening up export channels is in huge demand and our competitiveness as a nation rests upon it.
Digital infrastructure cannot be neglected either: an environment to trade online 24/7 with reliable broadband across the country is an imperative if not an obligation, especially for rural opportunity.
Many of our clients rely on it to expand their reach – from the exporters benefitting from the Asian fascination of British goods, to the freelance community who must now deliver a consistent, professional service to stay self-employed.
Rights for self-starters
Self-employment and contracting isn’t going to go away, and I’m sure that many of the intended 600,000 start-up businesses of 2020 will be one-man bands who use contracting as a stepping stone to forming small businesses that employ others.
The Conservative manifesto said that there would be a review into the policies that ‘disadvantage’ the smaller business such as better provision for maternity rights, sickness allowances and pensions.
The expectation among business owners is that it must happen, and should happen soon so that the policies that compromise growth are arrested, and provision is made to assist the deficit some companies may fall into as a result of compliance.
Promoting Britain’s jewels
Policies put forward by the SNP were also of interest to a number of our clients, not least the pledge to promote the oil and gas industry. Promoting the UK to the rest of the world is a given, but focused initiatives that promote our expertise and innovation in specific fields have real merit and would not only sustain jobs but also propel growth. Putting Britain back on the map for engineering, design and technology while safeguarding jobs is one many an industry leader would welcome, wherever they are based.
Linked to this is our ability to export home grown new talent in professional services. Whilst the Conservative’s pledge to have 3 million more apprenticeships by 2020 is commendable, we must offer school leavers an alternative to university and apprenticeships. This is something we support here at inniAccounts – we allow young people to leave school and ‘earn and learn’ to build a professional career, and I’d like to see more businesses follow suit.
Clarity on Europe. Now
The EU is perhaps the biggest thorn in the Conservative’s side. Business leaders from FTSE through to the sole trader will want an end to uncertainty so they can plan their futures.
A number of our clients have expressed concern that a break from the EU would undermine their links to industries such as science and engineering, and preclude them from the lucrative contracts they enjoy today.
For other clients, such as indie software houses, the EU represents a large, accessible and straightforward market in which to do business: contrast this with the complexities of trading with Asia.
That’s not to say some reform of EU policy wouldn’t be welcome. Take for example newly introduced EU place of supply VAT legislation. The goal of this policy may be praiseworthy – to prevent wholescale abuse of the tax system by multi-nationals, but the administrative impact can be crippling for a small business looking to export digital services to the EU.
That’s why we’d welcome the Green party’s suggestion to free small businesses from this unnecessary bureaucracy, alongside a wider review of policies impacting small businesses.
The coalition provided much needed stability and the resulting outlook shows promise. But expectations are high. Finishing the job was the Conservatives mantra, and finish the job they must.
This is abridged version of an article I wrote for Minute Hack. You can read the complete article here.