General Election 2017: Which Party Is Best for Small Businesses?

Small and large businesses face the same challenges and opportunities. The biggest difference between us is that we have more limited resources to deal with them. Whereas the big guys can dodge tax, we have to pay it. Staff costs are disproportionately huge for us and we have no HR department to cope with the admin. Big businesses pay people to conform to the many regulations, we have to do it all ourselves. While we struggle to get finance, banks love to lend to the big boys.

Taking tax first, only the Conservatives intend to bring down the rate of corporation tax. Labour have said they will raise it but there will be a lower rate for small businesses, lower that is than the rate for large businesses but not necessarily lower than the current 20%. The Lib Dems will keep corporation tax at 20%. This is the headline policy that will probably swing the vote of many business owners but there’s much more at stake than how much tax we pay. First, we have to make a taxable profit.

Cost of staff is highly significant and it's going to go up. All the parties are keen to raise wages but are looking a few years ahead. The Conservatives say they will make the minimum wage 60% of the median wage. I’m open to correction but I think that, if applied now, this would mean £8.32 per hour (which is over 10% higher than the current National Living Wage). Labour want us to pay our employees £10 p.h. by 2022 (one third higher). It’s hard to compare like with like because we don’t know what the median wage will be by the early 2020s but Labour’s rate is probably a bit higher than the Conservative one. However Labour promise small businesses help in coping with the cost. The Lib Dems will set up an independent review.

To get some money into our businesses, Labour will set up a National investment Bank to fill gaps in lending. The Lib Dems will get the state-owned British Business Bank to help and they plan to give people starting a business £100 a week for the first 26 weeks. The Conservatives are aiming to increase government investment in R&D to 2.4% of GDP within 10 years.

All parties promise to review business rates, which may please high street retailers, but this is rarely a concern for businesses in small offices who benefit from Business Rates Relief (a Labour government innovation, by the way). Equally vague and equally ubiquitous are promises to reduce red tape.

In conclusion, it’s hard to say which party cares the most about small business. What is clear to me is that all three parties recognise the importance of the contribution made by the self employed and the owners of small businesses, so it’s no longer a given that the owners of small businesses should vote Conservative.

If you were to decide your vote purely on what’s best for your business, I imagine the crucial factor would be which party will do best for the economy. A growing economy benefits all. Not to ignore the importance of investment in infrastructure and encouraging spending and investment, the overriding question is, who will get the best result from Brexit?

So small business owners will be asking: who will deliver continuity in our trading with the EU and who will ensure that we can continue to get skilled labour?

As someone who in the past tried to fill in the labyrinthine paperwork involved in exporting outside the EU, I will be asking who will be most likely to negotiate free trade deals with the world that are not only free of tariffs but also free of red tape.

Mrs May has tried to make the election about whether she or Mr Corbyn will get the best deal from Brexit. A question she no doubt believes is rhetorical. Seeing what has happened during this campaign, I am not yet convinced by her or him that they have the negotiating skills to get the outcome needed by small businesses.

This blog is written by Paul Lewis, owner of the Winchetser based small business marketing consultancy Seven Experience.