Which way to vote? Finding the party for small business.
- 21 Feb
I am a floating voter.
I can’t ever recall having been so interested in the outcome of an election and my vote is there for the taking by the party that can convince me that it is the party for small business.
After more than 12 years of Labour government, and a definite sense of this being the low point, I can see the argument for it being time for a change. I live in dread, however, of the country being slammed into reverse by a Conservative party that is bent on unwinding all previous policies and that will spend at least 2 years blaming its performance on the situation it has inherited rather than concentrating on recovery.
As I have said in an earlier post, I rate Brown as a financial manager and the prospect of Osborne in No.11, who I have yet to hear say anything meaningful, leaves me cold.
To help resolve my dilemma, I have spent the morning reviewing the websites of the 3 main political parties to try and decipher their policies for small businesses.
Surprisingly, or not, depending on your persuasion, the Labour party doesn’t have a specific section for business on its website, nor does it list business under its policies. Surely, this is a major own goal.
I want to know where the Labour party stands on business in general and employers' NI and Corporation Tax in particular.
Employers' NI is an explicit tax on recruitment and it seems illogical to me to be increasing this at a time when we want to get people back into work. Corporation Tax drains small businesses of funds for investment or survival. What was the rationale for removing the £10k tax free band and, more importantly, does Labour propose to bring it back?
The Conservatives do a lot better. Business is listed as a clear policy area on the website and within it there are pledges that counter the Labour position.
The Tories promise to abolish tax on new jobs created by new businesses.
I like the sound of this and want to know more. Will the policy only apply to businesses that start-up post the election? I hope not. There should be an incentive for all small businesses to take on new staff. Established small businesses offer a more stable and secure employment environment than start-ups and are better able to fuel sustainable growth.
The Tories also say they will cut the small companies’ Corporation Tax rate. Unfortunately, there is no detail on when, how and by how much.
The Lib Dems seem destined to remain the perennial third party. They too promise to cut the rate of corporation tax and say they will do this through the removal of complex reliefs.
Digging a little deeper I find a policy that says the party will allow small businesses to choose to be taxed on cash flow rather than accounting profit. This sounds interesting. In theory, it will allow growing businesses like ours to reinvest.
As a business that has just moved premises and is investing in their improvement, the Lib Dems' pledge to cut business rates for smaller businesses and calculate rates on site values also catches my eye. The present system of total rental value penalises us for the improvements we are making.
So, a mixed bag with intriguing, but unsubstantiated ideas dotted all around.
The one thing that all the parties have in common is a promise to cut red tape and ease the burden of regulation. Politicians always make great play of this and yet never seem sure about what red tape and regulation they are referring to. This seems to be an easy line to bulk up the manifesto, without any real substance or measure of success. Red tape and regulation are nowhere near the challenges that tax and cash flow are and I wonder if it simply betrays a lack of understanding of where the real issues are.
Despite lauding small businesses as the engine room of the economy, none of the parties seem to be talking about the sector in any detail yet. I have written to each of the parties with specific questions. The best response is likely to get my vote.