It now looks as though political stasis and all the damage that does to business will be lifted in 2020. Boris Johnson’s victory in the election is the Tories’ strongest since the Thatcher era, and gives him great scope to implement bold policies. At this juncture it’s worth taking a look at the main points in the Conservative manifesto.
There are plans for SMEs to have “access to finance and credit (not least mortgages), making the tax system easier to navigate, and examining how better broadband can boost homeworking.”
Business rates will be reviewed, specifically with plans to reduce them, and discount them for “grassroots music venues, small cinemas and pubs”.
The government will direct more of its procurement to small companies with a pledge to pay them on time, unlike a lot of the larger clients that SMEs deal with. They will “clamp down on late payment more broadly and strengthen the powers of the Small Business Commissioner to support small businesses that are exploited by their larger partners”.
There will be some updates to employment law, including giving workers the right to ask for stable contracts, fostering more flexible working, making it easier for fathers to take paternity leave. There will be a new “National Skills Fund” worth £3bn over the life of the parliament, which will fund-match with employers who are willing to invest in training for their staff.
From a tax perspective, Johnson plans to freeze National Insurance, income tax, and VAT, increase the Employment Allowance, raise the NI threshold to £9,500, and increasing research and development tax credits rate to 13%, as well as reviewing the actual definition of R&D.
It is arguably not as radical as many would like: it would be nice for instance to see corporation tax shaved, or a guarantee that the minimum wage will not go above a certain level. This would provide real reassurance to businesses many of which have been hit hard by the stagnation of these Brexit nether years.
But at the very least it is good to see some action intended on business rates – that’s the killer, that’s the one everyone wants to see sorted.
Here’s hoping Johnson is a competent and effective PM once he really gets going. In the brave new world of having left the EU, the UK’s 5.8 million small businesses and self-employed people need as many breaks as they can get, to boost the economy as far as possible.