It’s fair to say that a Conservative majority was not the outcome most people anticipated from the recent UK election. Most people were anticipating another hung parliament, with the exit polls backing up this prediction as well. However, when the results started to feed through it became evident that David Cameron and the Tory government had done much better than anticipated. But, what does this all mean for small businesses?
There is only one place to begin, and this is with the Small Business Manifesto that was set out by the Conservatives. The party pledged that it would increase the number of start-ups, with a goal of 600,000 start-ups a year within five years’ time. This is an attainable goal, considering there were 580,000 start-ups created last year. However, there were many new initiatives and pledges stated within this manifesto that could help new companies and small businesses. This includes trebling the start-up loans program, a review of benefits for the self-employed and investment in superfast broadband for entrepreneurs.
There is also the possibility of a shake-up in terms of employers’ rights. In the previous Beecroft report, there was a suggestion of allowing employers to make no-fault dismissals. This essentially meant that employers would be able to fire employees without giving a reason, which led critics to suggest that it was making it legal to sack people at will. Nevertheless, the Liberal Democrats overruled this. Now that the Conservatives have a majority we may see these reforms implemented in full.
A lot of business owners are hopeful that red tape will be slashed, relating to the unnecessary paperwork and regulations that are required. Conservatives promised that they would save businesses £10 billion by reducing these sorts of regulations, which was music to the ears of many company owners who complain of red tape because they feel it stops them from investing and employing people because it is extremely time consuming and costly.
According to a number of accountants in North London businesses will need to prepare for a number of changes when it comes to tax. This includes a freeze on VAT, a cut in corporation tax, national insurance holidays and increases in personal tax allowances. It is also likely that there will be a review of business rates, but how this will manifest remains to be seen. One thing a lot of people will eagerly be awaiting is to see how the Tory party deals with helping companies to gain funding, as this will be essential for the growth of the country’s economy.
If the Conservative party deliver on their promises we can certainly expect a number of changes that impact small businesses over the coming years. But, as is always the case, we will have to wait and see whether these proposals actually come to fruition. Needless to say, one of the largest and thorniest issues that may impact all businesses is the UK’s membership of the European Union, with the in-out referendum assured to have a monumental impact on the entire make-up of the UK.