Within all the rhetoric of concussed cyclists and this ‘One Nation’ of ours, Miliband put forward some very interesting ideas he’d like to implement if he can oust the coalition.
Along with talks about the minimum wage and freezing energy prices, Miliband made the claim that Labour is the ‘party of small business’. That’s a nice thing to hear, although the coalition too have spent time and energy essentially claiming the same thing. How does Miliband suggest that his party really will improve the situation for the near 5 million small businesses out there?
It all comes down to some re-jigging of the Tory tax plans. Come April 2015, the government plans to raise business rates for small companies. What Labour intends to do is reverse this and then freeze the rates until 2016. Although that essentially equates to promising to do nothing for a year, it is an attempt to try and support small businesses.
Of course, the coalition is all about budget balancing at the moment. They obviously had plans for the extra income those increased rates were going to give, so won’t Labour’s plans leave the country out of pocket? Well, no. The government plan was to cut Corporation Tax from 21 per cent to 20 per cent. This would have applied to all companies, including the little ones. Labour has decided to get rid of this plan to offset the lost revenue from the frozen small business rates.
This all means that your small business will be better off as the decrease in Corporation Tax would have been made redundant by the changing rates. Now, according to Labour, on average small businesses will by £450 better off a year, with some even being £2,000 better off. It’s a very clean manoeuvre that barely constitutes a policy, but will proffer a very different outcome.
Small businesses obviously struggle, but it’s easy to forget just how important they are to the British economy. According to the Federation of Small Business, they account for 99.9 per cent of the private sector and contribute 48.8 per cent of its turnover. It’s vital governments don’t underestimate their importance to our economic recovery. That also means they offer a lot of jobs, something the UK is desperate for.
While there will most likely be some moaning and whining from the larger companies (the energy industry’s response to price freezing has proven the chance for this is high), small businesses are a crutch for the UK economy and anything that can help them get by should be encouraged.
The UK strives on innovation and that come from, more often than not, the smaller enterprises holed up in their half-dining room, half-home office. Extra support for them is simply the right thing to do, and seeing simple ideas with clear outcomes is the right way forward – whichever party is brave enough to start implementing them.
Joshua Danton Boyd is a copywriter for Crunch Accounting, an online accounting firm based in Brighton.