The Liberal Democrats released their manifesto yesterday (November 20) in the run-up to the next general election on December 12.
The party have dubbed themselves as the “party of business”, pledging to get rid of business rates and tackle the ongoing issue of late payments.
Sifting out the central promises for entrepreneurs, we hear what the industry experts think about the Lib Dems’ manifesto.
‘Require all government agencies and contractors and companies with more than 250 employees to sign up to the prompt payment code, making it enforceable’
The Lib Dems hope to take on the scourge of late payments by enforcing large businesses to adhere to the Prompt Payment Code (PPC). It’s been well received by the business community.
Paul Christensen, CEO at fintech Previse, said:
“Jo Swinson’s promise is a welcome step in the fight against late payments.
“For too long, SMEs have suffered from slow payments that stifle their growth and cut off their cash flow.
“Slow payments don’t just hurt SMEs, however, but also large corporate buyers. The expensive financing of SMEs has to be built into the cost of goods and services that the corporate buys. Put simply, it is a very inefficient way to do business.
“With developments in machine learning, it no longer has to be this way. Invoices can be paid the moment they are received.”
Phil Hall, AAT head of public affairs & public policy, said:
“Late payments have an incredibly negative impact on British business, especially the SME community, and so after years of minor tweaks, voluntarism and ineffective tinkering, it’s encouraging to see the Liberal Democrats recognise the need for legislative reform.”
‘Review recent proposals to change the IR35 rules’
Changes to IR35 rules for private sector freelancers which are due to come into effect during April 2020 has been controversial. Individuals and organisations have been calling on this move to be reconsidered.
Julia Kermode, chief executive of The Freelancer & Contractor Services Association (FCSA), said:
“FCSA welcomes the Lib Dems’ pledge to review the Conservative’s proposals to change the IR35 rules.
“IR35 reform is one change that has not been properly targeted, not been proportional and not been fair for the vast majority of genuine self-employed workers or the businesses that have engaged them.
“Now is not the time to penalise the UK’s flexible workforce.”
Federation of Small Businesses (FSB) national chairman, Mike Cherry, said:
“A wholesale delay to the April enforcement date should be the starting point for this.”
Moving away from business rates
‘Replace business rates in England with a Commercial Landowner Levy based solely on the land value of commercial sites rather than their entire capital value’
Shifting from business rates to commercial land value tax is a key policy, but one expert says it’s not without its problems.
Mike Cherry added:
“The commercial land value tax is a cause for concern – business rates are a disgrace, but it is important not to replace one badly thought out system with another. You could easily end up with a situation where landlords continually insist on big rent increases, citing this new tax as the reason.
“There must be protections put in place for small businesses – nobody wants business rates times ten.”
Expanding the apprenticeship levy
‘Expand the apprenticeship levy into a wider ‘skills and training levy’’
Policies around a “skills wallet” were more divisive, as shown below.
Edwin Morgan, director of policy at the Institute of Directors, said:
“The sustained focus on skills will be welcomed by directors, specific stress points in the system have been well diagnosed, from childcare to lifelong learning. Expanding the apprenticeship levy into a wider ‘skills and training levy’ is right on the money. Employers need the flexibility to develop talent in a wide range of areas.”
Mike Cherry disagreed:
“Expanding the apprenticeship levy – without proper review and reform – could cause all kinds of issues for firms up and down supply chains. With levy funds running out fast, it’s essential that funding levels are increased to enable more apprenticeships within small businesses.”
Small business support
Should the Lib Dems reach No 10, their focus would be to help small and medium-sized businesses and that’s reflected in their policies.
Edwin Morgan said:
“On the UK’s productivity challenge, the Lib Dems have struck a welcome balance between big picture regional and infrastructure funding efforts and supporting business growth on the ground, from its ‘start-up allowance’, to widening R&D tax credits, to boosting the British Business Bank.”
Mike Cherry said:
“Commitments to increasing parental pay for the self-employed and expanding the remit of the British Business Bank are all much-needed. So too are promises to introduce a new start-up allowance and widen the scope of the future high streets fund.”
We’ll publish a run-through of general election policies once all of the party manifestos have been released