IN a remarkable first, soon after attaining power the coalition government changed the landscape for the calling of general elections with the passing of the Fixed Term Parliament Act 2011.
Under the old regime, the calling of an election was generally in the gift, so to speak, of the prime minister, subject to a maximum of term of five years. The new Act, however, specified that a general election be held on the first Thursday of May, every five years, unless there’s a motion of no-confidence in the government or two-thirds of seats in the Commons agree a motion for an election.
What does this all mean? Not only has the prime minister lost a key element of power, the public will now face even longer campaigns and just as importantly, can diarise for the next election on Thursday 7th May 2020.
While the policies of each party will become more visible as election day gets closer, the water will become more muddied as the rhetoric rises. The parties differ in their approach to publicising their policies – in fact, they could be described as reluctant to codify their thoughts. So how are they trying to win the business vote?
Europe and further afield
According to the Conservative Party, the EU is heading in a different direction to that the UK signed up to. It sees the single market as valuable but European interference excessive. The party plans to renegotiate the UK’s relationship with Europe and would offer the UK population an in/out referendum in 2017.
Further, the Conservatives plan to prevent benefit tourism, tighten the rules for migrants, seek greater control of justice and home affairs and renegotiate the UK’s financial contribution to Europe. And, of course, it wants to keep the pound.
The Labour Party wants no more powers transferred to Europe without an in/out referendum, reform of the EU and reform of the free movement of individuals.
Immigration would be controlled, with 1,000 new border staff and the counting of visitors both in and out. Illegal immigration could, reckon Labour, be controlled by reinstating fingerprint checks at Calais and closing down student visitor visa loopholes.
A Labour government would ban recruitment agencies from only hiring overseas, ensure that EU migrants earn an entitlement to benefits, and would require public sector workers in public facing roles to speak English.
The Liberal Democrat Party believes the UK should stay in the EU because they see more than 3 million jobs linked to trade with the EU. It also thinks being in Europe helps the UK when negotiating non-EU trade deals. However, it wants further cuts to the EU budget and bureaucracy while seeking open borders for “highly skilled, entrepreneurial people”.
The economy and tax
Turning to the UK economy next, the Conservative Party points to past achievements and plans to continue to the £2,000 reduction on employee national insurance for all businesses and would further abolish national insurance on jobs for those under 21 and, from April 2016, apprentices.
The party would keep corporation tax at 20%, the 100% annual investment allowance for capital purchases to £500,000 until the end of 2015, and would keep the (doubled) small business rate relief until April 2016.
The Labour Party says it wants the budget to be run in surplus and aims to do this by further reducing tax avoidance, introducing a “mansion tax” on houses valued over £2 million and restoring the 50p rate of tax for those earning over £150,000. Lower earners would benefit from the re-introduction of a 10p starting rate of tax. Labour wants a levy on payday lenders with the funds raised going to low cost alternatives like credit unions.
Also being part of the government means the Liberal Democrat Party can part-claim to have cut corporation tax from 28% to 21% (20% for small businesses with profits up to £300,000), and helped save businesses £2,000 on their national insurance bills via the Employment Allowance.
But going forward, the Liberal Democrats want further reforms to business tax, including business rates, which they see as a disproportionate burden on smaller businesses. Personal tax allowances would be raised to at least £12,500. Overall, it wants to raise taxes on the better off by £8 billion with an alignment on capital gains tax and income tax and a mansion tax.
Employment and small businesses
The Conservative Party, being part of the governing coalition, has the advantage of being able to talk about its government record. It has set up the British Business Bank with a claimed £4 billion of backing and plans to keep Funding for Lending to further incentivise bank lending to businesses.
The party also plans to treble the number of start-up business loans to 75,000 by the end of the next parliament. The scheme would have £130 million backing.
If re-elected the plan is to make it easier for businesses to take on apprentices by abolishing national insurance contributions for apprentices under 25 and offering £1,500 grants to those taking on apprentices.
Under the Conservatives, employment law burdens would be further reduced for employers, together with more trade union reform. Proposals include requiring 50% membership turnout in ballots before strikes can go ahead, ending the ban on taking on agency workers where employees strike, and ensuring minimum standards of service for public bodies.
The Labour Party plans to help businesses with cuts in business rates for 1.5 million small firms followed by a rates freeze. The party says it would set up a Small Business Administration to work across government to support SMEs, and would also create a British Investment Bank and a network of regional banks to work at a local level. It also wants at least two new challenger banks on the high street.
The party would increase the national minimum wage to £8 an hour by the end of the next Parliament (in 2020) while increasing fines for employers who fail to pay the minimum wage and give local authorities a role in enforcement. Labour would abolish a loophole that allows firms to pay agency workers less than permanent staff. The law against maternity discrimination would be strengthened and the party would double paid paternity leave from two to four weeks while increasing rate of statutory pay from £120 to £260 per week.
An “Industrial Strategy” is part of Liberal Democrats’ policy to help sectors key to UK international trade, listed as motor vehicles, aerospace, low-carbon energy, chemicals and the creative industries. It would continue to back the Regional Growth Fund (“which has already delivered 573,000 jobs and £1.8 billion of private investment”). Liberal Democrats would ringfence the science funding spending budget up to 2016. Also, following coalition government policy, it wants to complete the roll-out of high speed broadband, to reach over 99% of the UK.
Keeping the lights on
Energy, and its associated (generally) rising costs, are close to the hearts of business which is why the Conservative Party says it wants to lower the UK’s carbon emissions but also wants to end public subsidies for planned onshore wind farms.
The removal of subsidies shouldn’t, say the Conservatives, lead to rising energy bills. At the same time, the party wants to improve competition in the energy market while maintaining a good mix on energy sources. Governmentbacked Ofgem has referred the gas and electricity markets to the Competition and Markets Authority over alleged anti-competitive pricing.
The Conservatives say the government also has measures in place, such as capacity auctions and proposals for new generation facilities, that it reckons would make energy supply more secure. Another plank in Conservative policy is an emphasis on fracking and greater tax breaks to the oil and gas industry to counter the fall in the price of oil.
The Labour Party is planning to freeze energy bills (both domestically and for businesses) until 2017, and would reform the market to increase competition and introduce simple tariffs. Typical savings claimed by Labour for the average business are around £1,800 a year.
Under Labour, Ofgem would be replaced with a new regulator with the power to force energy companies to cut their prices where there is evidence of overcharging. The party wants to set a firm 2030 “decarbonisation” target for electricity and would also enhance the Green Investment Bank.
The Liberal Democrats are keen on low carbon energy sources and claim their reforms to the electricity market while in government have created the world’s first lowcarbon electricity market that would stimulate up to 250,000 green jobs across the UK by 2020. They note an “infrastructure pipeline for energy” of £275 billion up to 2020/21.
Agriculture
Increased earnings and improving career opportunities in the food and farming sector is what the Labour Party would like to see. It notes the low pay and an employment culture often characterised by agency-work, short-term and zero-hours contracts.
Labour says the government’s abolition of the Agricultural Wages Board exacerbated this situation by removing protections for rural and agricultural workers. The party says it will work with the food industry to raise skills and wages, and help small firms and food businesses access the investment they need to expand and train.
The Liberal Democrats want continued reform of the CAP, elimination of the remaining protection and export subsidies while developing environmentally sustainable solutions to the growing demand for food.
The party says it would be proactive in ensuring farming support is concentrated on sustainable food production, conservation and the environment while tackling climate change and restoring habitats for bees and other flying insects. It also wants to increase the use of locally and sustainably sourced, healthy and seasonal food.
Again, the Conservative Party points to its record in government as proof of support for farming which it notes “is bigger than the aeronautical and motor industry”. It says it has put food and farming at the centre of the economic agenda and debate and wants farmers to have access to the technology and opportunities that others have around the world.
In terms of financial help, the Conservatives believe the £500,000 annual investment allowance will help the industry invest. In government, the Conservatives have cut DEFRA guidance by 80%, cut farm inspections by 34,000 a year; the party wants to improve the CAP and is continuing with the rollout of the Rural Payments system. As a governing party, it says it is pushing Europe on pesticides and GM and is working on better bovine TB control.
