The Conservative Party were the last to publish their General Election 2019 manifesto on 24 November.
Industry figures have praised the manifesto’s ‘pro-enterprise’ vision. However, there’s frustration over the focus on Brexit and public services coupled with a lack of detail around how the party would stimulate economic growth.
It has the smallest spending plans of the three main parties – £2.9bn a year compared to £82.9bn for Labour and £62.9bn for the Liberal Democrats.
Even still, experts are seeking more detail on what has been laid out in the document.
In his initial response to the manifesto, British Chamber of Commerce (BCC) director general, Dr Adam Marshall, said:
“While the Conservative manifesto strikes some of the right notes, business communities across the UK will be looking to see more substantial measures to boost growth, enterprise and investment from the Prime Minister and his party if they form the next Government.
“There are some welcome proposals in the Conservative manifesto on real-world business issues such as training, road maintenance and childcare, but businesses still need much more clarity on big-ticket items like HS2, how the UK’s future immigration system will work in practice, and how real power will be devolved to our towns and cities.
“Whoever wins the General Election, businesses need a moratorium on new costs and burdens, and targeted tax breaks to help SMEs invest and adapt to the changes in trading conditions that lie ahead.”
Let’s take a look at what other industry experts had to say about the manifesto’s main policies that affect small business owners.
‘We will get Brexit done in January and unleash the potential of our whole country’
Dr Adam Marshall said:
“There’s a big difference between ‘getting Brexit done’ and doing it right. The details matter to both businesses and communities – and the Conservative Party needs to be realistic with the electorate about the scale and complexity of the task ahead. Categorically rejecting the possibility of a longer transition period is a real concern, because it means businesses could face yet another damaging cliff-edge at the end of 2020.
Josh Hardie, CBI deputy director-general, said:
“The Conservatives’ manifesto pledges welcome action on the major issues that can improve living standards and opportunities across the country. Businesses will be heartened by a pro-enterprise vision, while looking for even more ambition on areas such as access to skills, infrastructure and reaching net zero.
“But the inconvenient truth remains: sustainable economic growth will be risked if there is a needless rush for a bare bones Brexit deal that would slow down our domestic progress for a generation.
“On Brexit, firms need the certainty of a closely aligned, frictionless relationship with the EU. The stability provided by transition is a vital first step, but it cannot be a Trojan horse for a bad deal.
“Supporting growth and funding public spending requires a comprehensive trade agreement for goods and services, and an end to damaging, politically driven cliff edges that have blighted our economy. Whoever is in Government must take the time needed to get this right.”
Edwin Morgan, director of policy at the Institute of Directors, said:
“When it comes to Brexit, business will only feel it is ‘done’ when they know the terms of new relationship with the EU, not before. There is still a long way to go, and the next Government must put the needs of the economy first when negotiating on matters relating to trade and market access.
‘We will cut the burden of tax on business by reducing business rates. This will be done via a fundamental review of the system. As a first step, we will further reduce business rates for retail businesses, as well as extending the discount to grassroots music venues, small cinemas and pubs’
National Chairman of the Federation of Small Businesses (FSB) Mike Cherry said:
“It is right that in seeking to form the next Government, the Conservative Party has given clear pledges to support small businesses and the self-employed. Cuts to the Jobs Tax and business rates are strong pro-small business pledges. Small businesses will welcome these commitments as well as the commitment not to raise National Insurance for the self-employed and to clamp down on late payment.
“A pledge to extend business rates relief for most small businesses on the high street is a fair and sensible proposal which will support jobs, communities and the small firms which are at their heart.”
Support for the self-employed
‘We will therefore launch a review to explore how we can better support the self-employed. That includes improving their access to finance and credit (not least mortgages), making the tax system easier to navigate, and examining how better broadband can boost homeworking’
Mike Cherry said:
“It is very positive that the Conservatives have explicitly set out an intent to help the self-employed, including when it comes to accessing mortgages. Both this review, and the review into how business rates are cut, should begin on day one if the Conservatives form the next Government, to ensure they result in swift action.”
‘We will review and reform Entrepreneurs’ Relief’
Mike Cherry said:
“Entrepreneurs’ Relief serves an important purpose and is a large part of how many small business owners will plan for their retirement – we would urge that any reform of Entrepreneurs’ Relief is carefully considered and the consequences properly thought-through.”
Nimesh Shah, a partner at Blick Rothenberg, said:
“It’s not all good news for businesses as the Conservative manifesto proposes a review of Entrepreneurs’ Relief, citing that “some measures haven’t fully delivered on their objectives”. The review is likely to be in reaction to Labour’s proposal to abolish Entrepreneurs’ Relief completely and recent criticism from influential public bodies and so-called ‘thinktanks’.
“While the Conservatives propose a review of the relief, it is by no means certain that the regime will be limited or abolished completely, and in fact, there are growing calls within the entrepreneurial community that the relief should be extended.
“It is of course disappointing that the main parties have reacted to the recent negative suggestions around the valuable relief, which is considered to be a cornerstone of the UK’s entrepreneurial system and highly valued by business owners.”
‘We will increase the Employment Allowance for small businesses’
Mike Cherry said:
“Rising employment costs act as a deterrent to hiring more employees, and so offsetting that for small firms with a rise in the Employment Allowance to cut the jobs tax would be a very good step.”
Increasing skills in the workforce
‘We will create a new National Skills Fund worth £3bn’
Edwin Morgan said:
“On domestic policy, there is much for business to like, with a focus on skills, infrastructure and research. There is a desperate need to help businesses invest, so confidence-boosting measures around training and science funding will be welcomed.
Mike Cherry said:
“Adult retraining is essential to ensure no one is left behind as we embrace new technological change at an unprecedented rate. The Conservative pledge to provide extra funding for retraining is a positive step, allowing existing workers to expand their skills, especially digital skills.
“For younger people, FSB has long called for measures to fix the apprenticeship funding system, as well as ensuring small businesses in England can offer high-quality T-level placements. There should also be direct support for small business employers which provide work placements, and we would be keen to make sure the funding pledged today reaches small firms.”
Josh Hardie said:
“The National Skills Fund could make an important contribution to the significant upskilling efforts needed in the coming years. It needs to be delivered in partnership with business and come hand-in-hand with a detailed new immigration system that gives access to the full range of skills and labour the economy needs.”
‘We will fund more high-quality childcare before and after school and during the holidays’
Mike Cherry said:
“The cost of providing childcare in many areas outstrips current funding, affecting both small business childcare providers and parents who work for small businesses who struggle to find affordable childcare. Increasing funding to ensure the childcare sector can deliver 30 hours free childcare per week would be the right decision in the interests of families, employers, childcare providers and the economy as a whole.
“Childcare providers in England could also be supported by being given 100pc business rates relief, mirroring what already happens in Scotland and Wales.”
‘We will clamp down on late payment more broadly’
Mike Cherry said:
“Clamping down on late payment is welcome. This should include holding boards accountable for poor payment by making the audit committee of every large business responsible for payment practices and banning late payers from all public sector procurement, as well as empowering the Small Business Commissioner.”
Red Tape Challenge
‘Through our Red Tape Challenge, we will ensure that regulation is sensible and proportionate, and that we always consider the needs of small businesses when devising new rules’
Julia Kermode, chief executive of The Freelancer & Contractor Services Association (FCSA) said:
“Their Red Tape Challenge is something FCSA welcomes to ensure that regulation is sensible and proportionate. Small businesses have been hindered by red tape and administrative burdens for far too long.
“We have seen enormous amounts of legislation impacting businesses in recent years and this needs to stop now to allow for a period of consolidation so that businesses can be free to concentrate on what they do best, which is essential given the current economic uncertainty.”
Expanding Research & Development (R&D)
‘We will increase the tax credit rate to 13pc and review the definition of R&D’
Nimesh Shah said:
“Last week, Boris Johnson reversed the Conservative’s corporation tax rate to cut from 19pc to 17pc, which was due to take effect from 1 April 2020.
“Businesses may be excused from being concerned that this policy pre-announcement was a pre-requisite to possible business tax increases in the Conservative manifesto. In the detail of the Conservatives’ manifesto, they propose an increase to the Employment Allowance for small businesses and an increase to the research & development tax credit to 13pc, as well as potentially widening the definition of ‘research & development’ to allow more spend to qualify.
“The Conservatives estimate that these measures combined will cost the Treasury £800m in 2023/24. Therefore, whilst a corporation tax rate cut may no longer be on the agenda, the Conservatives have offered tax savings to businesses under a different guise.”
There was no mention of the IR35 (off-payroll tax) changes that will affect private sector freelancers from April 2020.
Dave Chaplin, CEO of contracting authority, ContractorCalculator, said:
“The politicians have been heavily lobbied by thousands of contractors as part of the Stop The Off-Payroll Tax campaign, together with representations made by relevant trade bodies for freelancers and businesses of all sizes. And the result? Zilch. All fallen on deaf ears.
“We are witnessing considerable damage to the financial services sector as contractors are terminated and work moved off-shore. The off-payroll tax is turning out to be what everyone expected: damaging to the valuable UK flexible workforce.
“It’s even more disturbing that the Conservatives are still purporting to be the party of business and the self-employed on the one hand yet hitting them with a massive new tax with the other.”
We’ll publish a run-through of general election policies shortly