Party lines

23 April, 2010
Which of the main political parties has the best policies for bakery businesses? Andrew Williams quizzes the Conservative, Labour and Lib Dem spokespeople on three key questions
Page 10 

What policies are you proposing to assist SMEs and those starting up businesses with accessing credit and business support?

MARK PRISK, SHADOW BUSINESS MINISTER, CONSERVATIVES:

We would use Government guarantees to create more diverse sources of affordable credit for businesses, building on our proposals at the start of the recession for a bold and simple National Loan Guarantee Scheme.

To help local firms, we will:

l Make small business rate relief automatic, as is already the case in Wales. This will be worth up to £1,263 a year in lower taxes for small firms in 2010-11.

l Give councils the power to offer local business rate discounts, in order to provide targeted local support (e.g. local pubs, local Post Offices, or promote a local business park, etc).

l Allow councils to keep the proceeds of business rate growth from new development for six years, to create a new incentive to help local firms and promote economic growth.

l Stop any new supplementary business rate being imposed on local firms, by requiring a referendum of local firms to endorse it.

We will undo Labour's changes to planning rules, which have weakened councils' ability to stop unwanted out-of-town development, and we will ensure a 'needs test' is re-adopted. We will also enable councils to take competition issues into account when drawing up local plans.

Pat mcfadden, minister for business innovation and skills, Labour:

We have done everything possible to get viable businesses through the global downturn. We moved to stabilise the financial system by preventing the collapse of the banks. And the cut in VAT put money into the economy at a critical time to increase consumer spending.

Over 200,000 businesses, which collectively employ 1.4 million people, have been able to delay £5bn in taxes through the Time to Pay Scheme. This has given businesses breathing space, by allowing them to pay their business taxes on a timetable they can afford. The Enterprise Finance Guarantee, meanwhile, has guaranteed loans to thousands of businesses up and down the country. This will be extended for another year meaning an additional £500m of bank lending.

It has been tough, but small business failure is less than half the rate of the recession of the 1990s. We recognise businesses will continue to need a helping hand. This is why schemes like the Time to Pay initiative and the Enterprise Finance Guarantee will continue with Labour.

As we look to lock in the recovery, we do not want to penalise people who wish to invest in their businesses. So we are doubling the Annual Investment Allowance from £50,000 to £100,000, provi-ding greater tax relief. As a result, 99% of businesses will be able to deduct all investments in plant and machinery in the first year from their taxable profits.

Unlike the Conservatives, we will not abolish these allowances, which give incentives for businesses to invest. So if you are thinking about investing in your business, or if your workplace is considering purchasing some new kit, the Conservatives would remove the tax relief that makes it easier for businesses to make these decisions. This is the wrong choice at a time when we need to support businesses that will create the most growth and jobs.

Getting credit from the banks is a real issue, so the taxpayer-backed banks will be required to lend £94bn over the next 12 months, with nearly half going to small firms. A new small business credit adjudicator will also have powers to make sure that small businesses cannot be unfairly turned down for bank loans.

And to help new businesses, as well as existing ones, business rates will be cut for a year from October. This will reduce the fixed costs of starting and running a small business for around 500,000 businesses in England. This change will mean a tax reduction for almost 100,000 shops.

JOHN THURSO, SHADOW BUSINESS MINISTER, Liberal Democrats:

We will make sure that SMEs can get the capital they need to succeed and grow. First, we will get the banks lending at affordable rates and at the volumes required to sustain the recovery particularly the semi-nationalised banks, which should be working for the benefit of UK plc. In the longer term, we will split low-risk retail banking from high-risk investment banking, so that the UK once again has a banking industry focused on lending to businesses to support economic growth.

Second, we will help to create new sources of equity through Local Enterprise Funds and Regional Stock Exchanges. These will connect businesses with investors in their own region and significantly increase the supply of equity to smaller businesses.

We will improve business support by reforming Regional Development Agencies to focus solely on economic development.

In what ways will you reduce the burden of bureaucracy and the barriers to running a successful business?

PRISK: Labour has drowned business with reams of red tape. The average small firm spends seven hours a week form-filling according to the Federation of Small Businesses. We will slash red tape through an innovative 'one-in, one-out' rule, whereby no new regulation can be introduced without cutting another with an equivalent cost elsewhere plus an extra 5% cut to the net regulatory burden.

Regulatory quangos will be tamed through the introduction of 'sunset clauses' (laws with expiry dates), where each one will have to justify their existence at the end of a fixed term.

Tax is a major barrier for small firms. That is why we will make small business rate relief automatic, saving eligible firms up to £1,200 this year and we will cut the small companies' corporation tax rate from 22p to 20p. To help those wanting to start and grow a business, during the first two years of a Conservative government, we will abolish tax on the first 10 jobs new firms create within their first year.

Through our proposed Office of Tax Simplification, we will also conduct a thorough review of all small business taxation with the aim of reducing its complexity.

It takes around 13 days to start a business that employs people in the UK. So we will make it easier for people to set up new enterprises by cutting the time it takes to start a new business, and making Britain the fastest place in the world to start a business. The Conservatives will reduce the number of forms needed to register a new business, and move towards a 'one-click' registration model.

Most importantly, we will stop Labour's tax on jobs, which will kill the recovery by cutting Labour's waste. We will raise the secondary threshold at which employers start paying NICs by £21 a week, saving employers up to £150 for every person they employ relative to Labour's plans. This will reduce the cost of Labour's tax rise on employers by more than half.

The choice for the industry at this election is clear five more years of Gordon Brown making things worse, or change with the Conservatives who have the energy, leadership and ideas to get the economy moving again.

MCFADDEN: We take costs to business very seriously. We will continue the Business Link service, which offers comprehensive practical advice to businesses, including free access to inter-active tools and model documents that are quick and easy to use. This help has already saved businesses an estimated £418m in administrative costs in the last year.

If used correctly, regulation can help drive innovation, as well as protect workers and consumers. We will make further progress in cutting the costs of regulation on growing businesses, especially the smallest. We will seek to reduce the costs of regulation by more than £6bn by 2015. This new target will cut the cost of regulation through £1.5bn in unnecessary paperwork and record-keeping, and £5bn in the wider regulatory costs that impact upon business. This will be met by looking at the following areas: Built Environment; Business Law; Consumer Issues; Employment and Skills; Health and Social Welfare; Natural Environment; Transport and Workplace Health and Safety.

THURSO: Businesses are hamstrung by an ever-growing tide of regulation, uncertain public finances and a shortage of key skills.

We will reduce red tape and manage the introduction of new regulations by ending the gold-plating of European directives; adopting a 'one-in one-out' policy; using sunset clauses; and introducing independent checks on the costs of regulations.

Stable public finances are vital to maintain low interest rates and provide clarity over future levels of taxation. We need a credible plan to reduce the deficit based on economic indicators, not political dogma.

With tax rates already high for businesses, the deficit must be tackled through controlling public spending. The Liberal Democrats have gone further than any other party in identifying over £15bn of annual savings, such as capping public sector pay rises to £400 a year, abolishing the Child Trust Fund and scrapping the last tranche of Eurofighter.

The education system is failing to provide many young people with the basic skills they need to hold down a job. We will ensure a better balance between academic and vocational education and take urgent action to boost the economy though a £3.3bn stimulus package. This includes support for vocations such as bakery by fully funding the off-the-job costs of adult apprenticeships and funding 15,000 more Foun-dation Degrees, which combine study with practical workplace learning.

What is your position on the growing power of the supermarkets with regards to supplier relationships and store expansions negatively affecting businesses?

PRISK: Supermarkets provide consumers with a rich variety of choice and great convenience, but there is evidence that the big retailers have used unfair practices to squeeze the profit margins of producers. We will introduce an ombudsman, in the Office of Fair Trading, to enforce the Grocery Supply Code of Practice and curb abuses of power, which undermine suppliers and act against the long-term interest of consumers. We also believe co-operation should be encouraged to give farmers more influence in the marketplace and will promote the expansion of local food networks.

MCFADDEN: The power that large grocery retailers can wield over their suppliers can still create pressures on small producers, which ultimately may impact on consumers. Free and fair competition is the key to a healthy market and it is right that there should be an enforcement body to make sure that the market is working in the best interests of consumers. In our manifesto we announced that, in order to protect farmers and food suppliers from unfair and uncompetitive practices by major retailers, we will create a supermarket ombudsman.

THURSO: For years, Labour and the Tories have twiddled their thumbs, while the supermarkets have pushed suppliers and rural shops to the brink. We seriously doubt that belated proposals for a supermarket ombudsman will properly rein in these big beasts. That's why the Liberal Democrats are committed to an independent food market regulator, with the power to enforce a legally binding Code of Practice. A regulator would have the power to pro-actively investigate abuses of market power and ensure that supermarkets no longer exploit suppliers or consumers. Invoicing rules will mean that refunds will appear on bills and cannot be negotiated down at the end of the year. Selling staple items, such as bread, at a loss will be regulated.

Successive governments have allowed the planning system to favour the construction of large new retail developments, even when there are existing high street shops standing empty. We will ensure a more strategic approach, strengthening planning laws by bringing in a local competition test and requiring local authorities to develop sustainable retail plans.


Key policies

l One-in one-out rule to slash red tape
l Review of small business taxation
l Cut the time it takes for new start-ups


Key policies

l Annual Investment Allowance doubled
l Regulation costs cut by £6bn by 2015
l A supermarket ombudsman created


Key policies

l Get banks to lend at affordable rates
l Create new sources of equity
l Reform RDAs to improve support





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