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Small businesses applaud Conservative business reform pledges

Small businesses and larger company directors both give thumbs-up to new Government's pledges to upgrade infrastructure and reform business rates

 Nighttime View of the Christmas Tree Outside the Palace of Westminster, Conservative business reform concept

Yuletide cheer: company directors' confidence in the economy is at its highest since the 2016 EU referendum

Business owners have given the incoming Government’s plans to invest in infrastructure and reform fiscal incentives a thumbs-up, according to two new surveys.

Both surveys, one from the Federation of Small Businesses and the other the Institute of Directors, were done post-election, when the Conservatives won a landslide majority.

Since then, Prime Minister Boris Johnson has claimed to hit the ground running, keeping the lights in Whitehall for the first 100 days of his administration.

>See also: General Election results leave ‘unanswered questions’ around IR35

Seven out of 10 small businesses say that the new Government’s pledge to invest £5bn to guarantee gibabit broadband would have a moderately positive (35 per cent) or very positive (34 per cent) impact. For firms based in rural areas, the figure rises to 72 per cent.

And the pledge to uprate the Employment Allowance – a discount on national insurance bills available to small employers – from £3,000 to £4,000 is also popular, with two thirds (65 per cent) seeing this as a positive step.

Nearly two thirds (64 per cent) of small businesses believe Conservative business reform pledges to overhaul business rates and extend the existing discount for hurting retailers will be positive if delivered.

An even higher proportion (70 per cent) expect commitments to invest in local roads and put £2bn into mending potholes to benefit them.

Confidence boost

Meanwhile, company directors’ confidence has leapt sharply upward following the election, entering positive territory and reaching its highest level since the 2016 EU referendum.

Overall confidence in the economy for the year ahead reached positive 21 per cent in December, up from negative 18 per cent last month – the largest positive swing recorded by the Institute of Directors.

Directors’ confidence in their own firms also increased to positive 46 per cent (up from 26 per cent last month).

However, half of the 952 IoD members surveyed say that the UK’s uncertain trading status with the EU is having a negative impact, with 53 per cent citing general UK economic conditions being the number one concern.

Commenting on its survey of 1,500 UK firms, FSB national chairman Mike Cherry said: “We’ve secured a raft of pledges from this new government aimed at injecting confidence into the small business community. It’s now time to turn kind words into action.”

Tej Parikh, chief economist at the IoD, said: “There are undoubtedly some exciting stocking fillers for business in the government’s agenda. Plans to increase and broaden R&D tax credits are a positive move, as is the commitment to lower business rates and invest in the skills system. For the longer-term, ambitious proposals on broadband, infrastructure and regional growth are music to the ears of many in the business community who want to finally see the dial shift on the UK’s lagging productivity growth.”

Further reading

Conservative Party 2019 manifesto deemed ‘pro-enterprise’ but lacking in detail

 

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