After the shock of the general election and subsequent hung Parliament, an agreement was finally reached this week which will see the Democratic Unionist Party back Theresa May's minority government. The deal will see the 10 DUP MPs back the Conservatives in key votes in the House of Commons.

The controversial deal will see an extra £1bn for Northern Ireland over the next two years – and has prompted calls for matching public investment in Wales and Scotland.

As part of the agreement, the DUP will support the Conservative Government on all Brexit and security legislation, while the triple lock guarantee of at least a 2.5% rise in the state pension each year, and winter fuel payments, will be maintained throughout the UK.

What are the implications for small and growing businesses?

The first thing to note is that the current uncertain political climate naturally works against almost all businesses. Without clarity on the policy priorities for the new administration – particularly when it comes to Brexit – strategic planning can be difficult as there may be a fundamental shift in the way we operate with our core export markets.


A Conservative-led administration, with a ‘confidence and supply arrangement with the DUP, now has the adequate number of votes to implement its manifesto – albeit with a very slim majority.

There are a number of ‘pro-business’ points in the Conservative manifesto which would likely benefit the small-businesses community, including:

  • A re-commitment to bringing Corporation Tax down to 17% by 2020.
  • A commitment to longer-term reforms to the business rates system that reflects a modern economy in which people increasingly shop online. This would likely include more frequent revaluations and potentially self-assessments.
  • The manifesto commits to simplifying the tax system, especially for small businesses and the self-employed. This could reduce both the time and cost involved in administrative activities - and likely boost productivity.
  • Commitment to 33% of central government purchasing coming from SMEs by the end of the parliament.
  • Use Government buying power to ensure that big businesses comply with the Prompt Payment Code. Late payments for small businesses has been a major issue for years as it can seriously impact cash flow.

That said, there are a number of pledges in the manifesto which could damage small business owners:

  • Theresa May’s manifesto commits to a hike in the National Living Wage to 60% of median earnings by 2020 and then by the rate of median earnings growth moving forward. This could significantly add to small business costs as a whole and make it more difficult for smaller companies to hire.
  • A large focus of Theresa May’s business policy centres around rights and protections for the gig economy. Although there are no concrete promises, the manifesto says that it will act to ensure the interests of people working in the ‘gig’ economy are all properly protected. Future policy on this matter could well be dictated by a new report being produced by Matthew Taylor from the RSA on the changing labour market. Any measure that strengthens entitlements for ‘gig’ economy workers will likely be met with disagreement from small business owners as it reduces the flexibility of its costs and could introduce a range of additional costs such as pensions, sick and holiday pay.