What the party manifestos mean for mid-sized businesses

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Happy Friday and first day of the Euros for those who celebrate. Today, we’re looking at the main party manifestos and the policies that affect medium-sized businesses and the people who run them.

Labour: “Pro-business and pro-worker"

The Labour manifesto says it is “pro-business and pro-worker” and “the party of wealth creation”. It vows to keep some of the policies the current government has instilled, such as the 25 per cent corporation tax cap, permanent full expensing system for capital investment and the annual investment allowance for small business.

The party has promised a reform of business rates but hasn’t detailed what that will involve. It says it will replace the business rates system “so we can raise the same revenue but in a fairer way”.

Another area of reform involves the British Business Bank. The key mandate will be to make it easier for medium-sized businesses to access capital. The party also promises to reform procurement rules to give these businesses greater access to government contracts.

One of the party’s other big pledges is the creation of a National Wealth Fund. Its focus would be to make “transformative investments across every part of the country”. The party says that its target is to “attract £3 of private investment for every £1 of public investment”.

The director of the Institute for Fiscal Studies, Paul Johnson, hammered Starmer yesterday saying the plans would “require putting actual resources on the table” but that the manifesto “offers no indication that there is a plan for where the money would come from to finance this”.

Conservatives: “The party of business”

In the same address, Johnson also said the Labour manifesto was better than “a shopping list of half-baked policy announcements” – an apparent reference to the Conservatives’ offering. Having been overtaken by Reform UK, according to a new YouGov poll, the government is firmly on the ropes less than three weeks away from election day.

The Tory manifesto claims that it “will always be the party of business” and it is full of reaffirmations of the party’s record. It promises not to raise corporation tax or capital gains tax and to “continue to ease the burden of business rates”, without getting into specifics. This lack of specifics continues in its mention of the VAT threshold, which the party says it will keep “under review and explore options to smooth the cliff edge at £90,000”.

Another promise is to improve access to finance for SMEs “including through expanding Open Finance and by exploring the creation of Regional Mutual Banks” and to secure a £250m fund to support female entrepreneurs. A 10 per cent increase in R&D spending, maintaining R&D tax reliefs and creating more Freeports are also mentioned in the manifesto.

The Conservatives also pledged to “seize the benefits of Brexit”. One of the ways they will look to do this to lift the employee threshold allowing more companies to be considered medium-sized. The party claims this will save small businesses “at least 1 million hours of admin per year”.