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2 weeks ago

General Election: Preview for Small Businesses

As July’s General Election approaches, small business owners across the UK have patiently awaited the pledges and promises of the leading political parties. The outcomes of this election could significantly impact SME operations, growth, and sustainability. This guide breaks down each party's manifesto, focusing on what they mean for various sectors.

Retail, Hospitality and Leisure

The Conservative Party has supported its pledge for re-election by laying out several critical policies to help small businesses in the retail, leisure and hospitality sectors. One of the primary initiatives is to ease the burden of business rates by gradually increasing the multiplier on distribution warehouses that support e-commerce, aiming to level the playing field between the high street and online retailers.

Labour is also focusing on business rates but planning to replace the current system entirely. Labour intends for this change to alleviate financial pressure on small businesses, particularly those based in town centres. Another policy is their commitment to reviewing procurement rules to ensure that British SMEs have greater access to Government grants, which could boost economic growth by supporting business operations.

The Liberal Democrats are advocating for the total abolition of business rates, which they plan to replace with a ‘Commercial Landowner Levy’. The Lib Dems designed this shift to reduce the tax burden on small business owners. The Lib Dem manifesto also includes measures to facilitate job creation and hiring, which could help to reinvigorate this sector.

Nigel Farage’s Reform Party proposes measures to support high street SMEs, including abolishing business rates. In their place, they suggest implementing a 4% online delivery tax targeting big firms and aiming to support brick-and-mortar operations. This approach seeks to create a more balanced competitive environment in the UK’s retail industry.

Wales’s nationalist party, Plaid Cymru, have published policies that include amending the business rates multiplier to provide relief. They also aim to ensure that companies within Wales receive 75% of Welsh public sector spending. Plaid Cymru designed this regional spending initiative to boost the Welsh economy and support its small businesses.

Chester city centre

Economy, Finance and Investment

To improve SMEs' access to funds, the Conservative Party plans to expand ‘Open Finance’ and explore the introduction of regional mutual banks. This initiative aims to provide tailored financial support for small businesses across the UK. Additionally, the Tories have committed to establishing a £250 million Invest in Women Fund, in collaboration with the British Business Bank, to support female entrepreneurs.

Labour's financial policies include reforming the British Business Bank to enhance its ability to promote regional growth. Some political pundits predict that this reform will provide SMEs with better access to finance, particularly in underserved areas of the UK. Keir Starmer’s party also plan to improve guidance and remove barriers to international trade for small businesses, making it easier for them to begin exporting and importing from overseas.

The Liberal Democrats propose working with major banks to create a local banking sector dedicated to meeting the needs of small businesses. This plan aims to provide more accessible financial services for SMEs. Britain’s liberal party also intends to end the controversial loan charge, offering relief to affected business owners.

The Reform Party’s financial policies include creating ‘SME Enterprise Zones’ with a 0% tax rate for startups and existing firms that create jobs in deprived areas. They also plan to cut entrepreneurs' tax relief to 5%, providing incentives for business growth and investment in these zones.

The SNP’s financial policies focus on supporting the creative industries. Scotland’s nationalist party plans to work with Scottish Enterprise and Creative Scotland to enhance the business support available to creative industries with a £1 million programme of workshops, mentoring and courses.

Industry, Technology and Innovation

The Conservative Party promotes digital invoicing to streamline business processes and improve efficiency. The current Prime Minister’s party also plan to ensure that the Basel III banking frameworks do not inhibit banks’ ability to lend to British SMEs.

Labour’s industrial strategy includes support for innovation and regional growth. Labour has designed this strategy to support SMEs across sectors, ensuring they have the resources and opportunities to expand.

The Liberal Democrats aim to tackle late payments by requiring Government bodies and contractors to adhere to the Prompt Payment Code. Ed Davey’s party intend to ensure that SMEs receive timely payments, improving their cash flow.

The Green Party’s manifesto includes policies to support small businesses in their sustainability efforts. These include promoting green business practices and supporting innovation in renewable energy and energy-efficient technologies. Britain’s environmentalist party also proposes enhanced workers’ rights, which could impact small businesses' operational models.

Polling station

What Voters Need to Know

As the General Election on 4th July 2024 approaches, small business owners must understand the voting landscape and how it impacts their interests.

The UK is divided into 650 constituencies, each of which elects one Member of Parliament to the House of Commons. Your vote helps to determine who becomes your local MP and which party ultimately wins the general election.

  • England: 543 constituencies

  • Scotland: 57 constituencies

  • Wales: 32 constituencies

  • Northern Ireland: 18 constituencies

Most adults in the UK are eligible to vote in this election, with over-18s required to register by Tuesday, 18th June. Voters must also have an acceptable photo ID form on their person to vote on the 4th.

With over 4,500 candidates standing for election, no single party is contesting every constituency. In England, Labour and the Green Party are contesting all constituencies. In contrast, the Conservatives have skipped over Rotherham, and the Lib Dems have decided against fielding a candidate for Manchester Rusholme.

North of the border, the Conservatives, Labour, Lib Dems, Reform and SNP are standing in every Scottish constituency. In Wales, the UK’s three largest parties, along with nationalists Plaid Cymru, are contesting all 32. Across the Irish Sea, the Alliance Party and SDLP are contesting all 18 constituencies. The UUP is standing for election in 17, the DUP in 16 and Sinn Féin in 14.

Understanding the candidates’ priorities and party affiliations in your constituency is crucial to making an informed decision that aligns with your personal and business interests. Each party's policies can have significant implications for various sectors, and knowing who represents your area can help you advocate for your needs more effectively.

Counting Up

The upcoming general election presents a range of policies from the UK’s leading political parties that will impact small businesses across various sectors. From business rates and banking regulation to employment law and lending support, these promises could shape the future of the country’s economy and business environment.

Small business owners should stay informed and consider how party manifestos align with their priorities.

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Sam White