With David Cameron now having convened the first all Conservative cabinet for 18 years, most of the country may still be in a collective state of ‘where did that come from!’ The overwhelming nature of the election result caught many (including us) by surprise. Understandably, an awful lot of business owners, entrepreneurs and those start-ups wanting to scale up will be pondering what this means for them over the next five years. Johnny Munro from Funding Options looks at what the future holds.
The Conservatives will be relishing the opportunity to implement their entire business manifesto, particularly with no coalition compromises to think about. To save you the trouble of trawling through every soundbite before the election, here’s the skinny on what you can expect from David Cameron’s new government as a small business owner over the next parliament.
Stable government - More stable financial markets
The business report from the ICAEW about the first quarter of 2015 indicated that business owners’ confidence was lower than the levels seen last year – the lead up the 2015 election may have played a part in that finding. After all, the business world is always influenced by politics.
The surprise election result has already started to stabilise wavering business confidence; sterling’s performing well against the euro, share prices are up and government bond prices are on the increase. If you were putting off your growth plans and finding finance for your business before the election, the new climate might just be the proof you need to change your mind.
Bank referral scheme- Alternative finance
There is one policy which happily has already been passed with cross party support – The Small Business Act. In fact, it’s already been passed into law with the Queen’s sign-off.
A hugely exciting element of the Small Business Bill means that when you go to your bank for a loan or most other forms of credit, they will now be required to “signpost” you towards an Alternative Online Finance Platform if they cannot assist you. This is already being referred to as the SME Referral Scheme. The British Business Bank has begun the process of designating private sector online finance platforms just for this purpose.
The hope is to close the funding shortfall many businesses experience if they are rejected by their bank – great news for small businesses.
Cutting red tape
The Conservatives have long pledged to act on so-called ‘red tape’, and in their manifesto promised to cut £10 billion worth of it in this Parliament. The real challenge for the Government will be defining exactly what this ‘red tape’ is, and ensuring that it frees up business owners’ time.
Business rates review and tax changes
A central manifesto pledge from the Conservatives is a raft of new changes including increases in personal tax allowances, cuts to employer national insurance, a further cut in corporation tax and a freeze on VAT. As David Cameron’s party attempts to cement its position as champions of small business, expect a review of business rates, too, planned for 2017.
Start-up loans trebling
One of the more illuminating manifesto pledges is the commitment to trebling the Start-up Loans company. A senior Minister recently said that SMEs were the ‘lifeblood’ of the British economy and the Conservative manifesto says it wants to give more would-be business owners the helping hand they need.
Levelling the playing field for SMEs
In keeping with the theme that the Conservatives are the party of small businesses, there are a number of manifesto pledges to interest business owners. Some of the other highlights include widening access to Government procurement contracts, and urgently reviewing the disadvantages often felt by the self-employed.
So there are the pledges, let’s hope they can be delivered. It will ultimately mean equipping small business owners, the ‘lifeblood’ of the economy, with the tools they need to get on & thrive. Small businesses have been stifled in recent years by the poor economy, a lack of access to finance and a general lack of support with their plans. It seems this Government is up for the challenge – we’ll see.
Johnny Munro is one of the account managers at Funding Options - they're a business based at Workspace who want to make business finance easy. Check out their website and follow them on Twitter at @FundingOptions.