Is the first majority Conservative government for nearly 20 years actually going to be good news for hardworking small business owners in the UK?
All three main political parties were quick to back small businesses during the election and recognise the important role they play in creating a sustained economic recovery, but new government support is being rolled out rather more slowly and cautiously.
The appointment of Anna Soubry as Small Business Minister, to work closely with Sajid Javid, Secretary of State for Business, Innovation and Skills, is a positive first move in the right direction. Although Anna Soubry doesn’t have a particularly relevant business background, her remit is a sensible one: to promote competitiveness and growth in the UK’s 5.2 million SME’s.
The New Apprenticeship programme was included in the Queen’s Speech, with a public commitment to provide a further 3 million apprenticeships by 2020, however, less has been said about the manifesto pledge to increase start-ups to 600,000 in the same timeframe. Interestingly, the definition of ‘apprenticeship’ is to be protected by law to ensure high standards of training are maintained, but potential funding delays for SME’s taking on apprentices has yet to be addressed.
Clarity and easier access to finance options for smaller businesses is also still very much on the agenda. There’s likely to be a significant rise in the use of e-lending as it fills the void left by high street banks who have failed to support the sector with business loans.
Red tape reductions, along with business rate reviews and tax cuts have all been mentioned since the elections, but the previous government’s Red Tape Challenge failed to shield micro businesses from a raft of new employment legislation. According to a previous study by Reform, the Coalition government managed to remove £1.2 billion worth of regulations since 2010, but also created an extra £4.3 billion!
It’s unlikely that the Conservative government is going to tinker much more with Family-Friendly Policies, but they have inferred that maternity pay may be extended to the self-employed and access to childcare will be overhauled this year, along with increases to free childcare.
The National Minimum Wage will continue to rise gradually, reaching £8 per hour by 2020, but it sounds like the Living Wage will remain a voluntary option for the time being, with no legal enforcement.*
Equal Pay was another election hot-topic, but Conservatives are likely to focus their attention on pressuring larger companies to publish gender pay differences, leaving smaller employers to voluntarily close their gender pay gaps.
All has gone quiet regarding changes to the UK Employment Tribunal fees structure, but the management of Employment Tribunals and fees may appear in the proposals for Scottish devolution.
Finally, exclusivity clauses have been banned from being used in the highly publicised Zero Hour Contracts, but there is still scope for the government to provide more guidance regarding their proper and ethical use.
I do think there is some genuine small business optimism in the air, but the true impact of these changes will take time to assess and then, of course, there’s the potential impact of Brexit to consider!
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* U P D A T E (July 2015)
The government has announced that there will be a higher minimum wage (to be called a National Living Wage) for workers aged 25 and older – £7.20 an hour in April 2016, increasing to £9.00 an hour by 2020. However, the current Living Wage according to the Living Wage Foundation is set at £7.85 (£9.15 in London)! Business owners will have some tough budgeting decisions to make regarding these rates, especially when they calculate the additional costs involved with pension auto-enrolment contributions.