Next month’s election might seem like a foregone conclusion. Labour has regained some ground in the polls in recent days but the Conservatives look likely to ride to a decisive victory. Early hopes of a Lib Dem resurgence among anti-Brexit voters look likely to be dashed, and UKIP’s chances of gaining even a single seat look slim.
Nonetheless now that the major parties have actually set out their plans for government it’s worth taking a look at what they’re offering. The outlook for business isn’t especially rosy. Under Jeremy Corbyn, Labour is more hostile to UK Plc than at any time in recent years – even if it is trying to present itself as a friend to small business.
And compared with her predecessor, Theresa May seems less keen to court the support of companies – she got rid of David Cameron’s business advisory panel and talks of boosting worker representation on boards and making it even harder to recruit skilled workers from abroad. Here’s a rundown of what the major parties are offering:
(For the benefit of our readers north of the border we’ll be updating this once the SNP’s manifesto is published)
Theresa May has spent most of the campaign repeating ‘strong and stable’ ad nauseum but today her party finally revealed its hand. The Tories are traditionally regarded by businesses as the most trusted party on the economy and in some respects their manifesto doesn’t disappoint. Its first pledge, ‘a strong economy built on sound public finances, low taxes, better regulation and free trade deals with markets around the world’ strikes a tone that many businesses will be happy to hear. But the devil is as always in the detail, and there are a fair few bits of small print that aren’t so promising.
The Tories propose:
Bringing corporation tax down to 17%, the lowest of any country in the developed world. An important carrot to keep multinationals in the UK post-Brexit.
Leaving the European single market (as expected). The manifesto says there should be ‘as few barriers to trade and investment as possible’ but there should be no doubt that leaving the single market will make doing business in Europe more complicated. On the other hand it will leave the UK free to strike its own deals with other countries.
Corporate governance changes. May wants workers represented on listed company boards, but this could be as feeble as boards having to nominate an existing NED to be a workers’ rep. Executive pay will be subject to an annual vote by shareholders and companies will have to publish CEO-average worker pay ratios.
Making it harder to hire migrants. The Conservatives remain committed to bringing net migration down to the tens of thousands per year. To do so they will need to further restrict skilled migration. To that end they will double the ‘skills charge’ companies have to pay to £2,000 per non-EU migrant worker, per year, as well as increasing the earnings threshold for those wishing to bring a spouse to the UK. How the system will work for EU migrants post-Brexit remains to be seen.
‘Fairer’ markets. We’ve heard a lot about the proposed cap on some energy tariffs but the Tories want to go further with proposals to increase regulation of property firms, mobile phone networks, car clampers, train companies, comparison sites and online subscription services.
Action on the gig economy. This is motivated by its tax implications as much as anything else. Details remain sparse and are likely to become clearer following Matthew Taylor’s employment review, which reports later this year.
A ‘digital charter’. The Tories say they want Britain to be the ‘best place for digital business,’ with ten million premises connected to fibre internet by the end of the decade, guaranteed wifi on mainline trains and the majority of the population covered by a 5G mobile phone signal by 2027. A ‘Data Use and Ethics Commission’ will be asked to draw up a new data protection law, ‘to ensure the very best standards for the safe, flexible and dynamic use of data.’
The tone of Jeremy Corbyn’s campaign – and the press coverage it has received – has been decidedly left wing, even compared with that of his predecessor ‘Red Ed’. But the party’s policies paint a more complex picture. While Labour plans to raise taxes on big businesses and the well-off it has been keen to be seen as a supporter of entrepreneurs, with plans to crack down on late payments and exempt small businesses from a planned rise in corporation tax.
Here are some specifics:
Renationalising rail, energy and water companies, and the Royal Mail.
Raising the headline rate of corporation tax to 26% by 2021 (Small businesses - with profits below £300,000 - would keep the 20% rate they paid last year)
Exempting those with a turnover of less than £85,000 from the new bureaucratic quarterly reporting tax regime
An ‘excessive pay levy’ on companies with employees on salaries of more than £333,000 and a maximum pay ratio of 20:1 for firms fulfilling public sector contracts
A less hardline but not entirely clear approach to negotiating Brexit – more on that here. Labour supports the end of freedom of movement but says it wants to retain the benefits of (if not membership of) the single market and customs union.
Stronger rights for workers: Banning unpaid internships and zero-hours contracts, giving part-time and temporary workers the same rights as full-timers and increasing the minimum wage to the level of the Living Wage. Abolishing tribunal fees and introducing trade union collective bargaining across whole sectors.
The Liberal Democrats
If you’re keen to avert Brexit the Lib Dems might be your best bet. Tim Farron’s party has pledged to hold a second referendum on the terms of the deal, says it is committed to ensuring Britain remains in the single market and the customs union and it’s the only one of the ‘big three’ parties that wants to preserve the free movement of labour around Europe. On the other hand the party also wants to reverse the planned cut in corporation tax, bringing it back up from 17% to 20% (Plus there's bad news if you’re a cannabis dealer looking to go legit - the Lib Dems want to legalise the drug’s sale and consumption, and slap a tax on it).
Its other business-related policies include:
Provision of mentoring and a ‘start-up allowance’ to make it easier for entrepreneurs get new businesses off the ground and scale them up
A review of the business rates system (which is welcome if vague)
Consulting on the future of corporation tax, including the potential of ‘shifting away from a profits-based tax to one that takes account of a wider range of economic activity indicators, such as sales and turnover’ to tackle tax avoidance.
‘Modernising’ employment rights to keep up with the ‘gig economy’ and creating a formal right to request permanent hours for those on zero-hours contracts
More action on diversity - including forcing large businesses to publish the number of their employees on less than the Living Wage and the ratio between top and median pay. Promoting employee ownership and giving workers the right to representation on company boards. Extending the Equality Act to all large companies with over 250 employees, requiring them to monitor and publish data on gender, ethnic minority, and LGBT+ employment levels and pay gaps.