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General Election 2024: A Guide to the Political Parties’ Pledges for Small Businesses

Jul 4, 2024 | Accounting

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As the UK heads to the polls today, small businesses across the country are keenly watching the promises and policies of the major political parties.

Each party has laid out its vision for supporting SMEs, addressing key issues such as taxes, funding, business rates, and regulations.

Here’s a breakdown of what the main parties are pledging and what it could mean for small businesses.

 

Conservative Party

The Conservatives have outlined a robust plan to support SMEs, focusing on reducing burdens and increasing support:

 

  • Business Rates: Gradual increase in the multiplier on distribution warehouses to ease the burden on retail, leisure, and hospitality sectors.
  • VAT: Keeping the VAT threshold under review to prevent small businesses from being adversely impacted.
  • Finance Access: Expanding Open Finance and exploring regional mutual banks to improve access to finance.
  • Employee Threshold: Raising the employee threshold for medium-sized business classification to reduce reporting responsibilities.
  • Tax Incentives: Retaining incentives like the Enterprise Investment Scheme and Seed Enterprise Investment Scheme.
  • Prompt Payment: Promoting digital invoicing and enforcing the Prompt Payment Code to tackle late payments.
  • Invest in Women Fund: Establishing a £250 million fund to support female and disabled entrepreneurs.

 

Other significant policies include not raising corporation tax, increasing R&D spending to £22 billion per year, and abolishing the main rate of National Insurance for the self-employed by the end of the next parliament​​.

 

Labour Party

Labour’s manifesto emphasises economic growth and fairness, with specific measures to support small businesses:

 

  • Growth and Skills Levy: Introducing a new levy to foster skills development and economic growth.
  • Business Rates Reform: Replacing the current system with a fairer business property taxation system.
  • British Business Bank: Reforming the bank to better support regional growth and provide more comprehensive funding.
  • Procurement Rules: Reviewing rules to give SMEs better access to government contracts.
  • Export Support: Improving guidance and removing barriers to help small businesses export their goods and services​.

 

The Liberal Democrats focus on creating a stable environment for businesses with several key reforms:

 

  • Business Rates: Abolishing business rates and replacing them with a Commercial Landowner Levy.
  • Job Creation: Making it easier to create jobs and hire employees by reducing regulatory burdens.
  • Environmental and Human Rights Duty: Introducing a duty of care for the environment and human rights in business operations.
  • IR35 Reforms: Reviewing off-payroll working rules to ensure fair treatment for the self-employed.
  • Local Banking: Working with major banks to create a local banking sector dedicated to SME needs.

 

Scottish National Party (SNP)

The SNP’s manifesto highlights several policies relevant to small businesses in Scotland:

 

  • EU Reentry: Aiming for Scotland to rejoin the EU and the single market to ease trade.
  • Maternity and Parental Leave: Increasing maternity pay and promoting shared parental leave.
  • Employment Rights: Devolving employment rights to abolish zero-hours contracts and close the gender pay gap​.

 

Green Party

The Green Party focuses on fair treatment for workers and supporting green initiatives:

 

  • Workers’ Rights: Repealing anti-union legislation and ensuring equal rights for all workers from day one.
  • Minimum Wage: Increasing the minimum wage to £15 an hour, with offsets for small businesses through reduced National Insurance payments.
  • Four-Day Working Week: Moving towards a four-day working week to improve work-life balance.

 

Reform UK

Reform UK promises significant changes aimed at reducing regulatory and tax burdens:

 

  • Corporation Tax: Increasing the minimum profit threshold and gradually reducing the main rate.
  • VAT Threshold: Raising the VAT threshold to £150,000.
  • Business Rates: Abolishing business rates for high street SMEs and introducing an online delivery tax.
  • Employment Laws: Scrapping certain employment laws to reduce hiring risks​.

 

Plaid Cymru

Plaid Cymru’s manifesto focuses on supporting Welsh businesses with several targeted policies:

 

  • Business Rates: Amending the multiplier to better support high street businesses.
  • Public Sector Spending: Aiming for 75% of Welsh public sector spending to be with local companies.
  • High-Speed Internet: Guaranteeing high-speed internet connections for all businesses.
  • Living Wage for Apprentices: Introducing a living wage for apprentices to support young workers.

 

By keeping an eye on these pledges, small businesses can better understand how the outcome of today’s election could shape their future.

 

 

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