Regardless of an individual’s personal political stance, every business owner has an interest in how the outcome of a General Election will affect their company.
Whilst many business owners may claim to be too busy to pay much attention to the televised debates or what politicians are saying in the media as we rapidly approach June 8th, one thing remains true: whether it’s a Conservative or Labour victory, they’ll be some changes ahead for SMEs.
The changes ahead also depend on the sector in which a business operates; and whilst some pledges might be popular, others may seem like more of a step-back than forward. It’s therefore vital that you know what the main parties are proposing, before entering the polling station, not after.
So, what are the main parties saying, and how might their pledges affect you and your business within the property and/or construction sector?
Taxation:
All parties have made promises to ease the pressures on SMEs from various taxes. Although, as well we know, some taxes affect those within the property and construction sectors harder than others. The Conservatives have pledged to increase the personal allowance for income tax to £12,500, and raise the higher rate threshold to £50,000. Meanwhile, both Labour and the Lib Dems are intent on reviewing the recent rise in business rates.
The property industry has been hit particularly hard by the recent hike; for those who own and develop properties in cities and town centres that have experienced a property price boom, it has represented a huge increase.
On top of this Labour wants to increase corporation tax for large businesses, and bring in a lower small profits rate of corporation tax for SMEs. The Liberal Democrats have also vowed to better support entrepreneurship, with plans to implement a new scheme that would pay selected entrepreneurs £100 a week for six months to support their living costs.
What will this mean for the property industry?
There’s clearly some good news for the industry if either Labour or the Liberal Democrats win the election. Whilst the Conservatives haven’t made such explicit promises on business rates and corporation tax, the fact that their biggest rivals are prioritising the issues should ensure that it remains top of the agenda as the new parliament forms.
Employment:
There’s a huge variation in the political parties’ promises across the board when it comes to the employment of both UK nationals and immigrants. The Conservatives want a ‘hard Brexit’ and have proposed to double the Immigration Skills Charge to £2000 per year for each non-EU worker employed by a business. Meanwhile, when it comes to Brexit, Labour claim their priority is ‘jobs’ and the Lib Dems wants to guarantee the rights of EU nationals living in the UK.
Regarding the employment of UK nationals, Labour has promised to ban one of the most controversial features of the modern economy: zero hours contracts. Labour also wants the living wage paid to all employees over 18 and to grant all workers equal rights, including temporary staff. The Liberal Democrats have similarly proposed a ban on zero hours contracts.
What will this mean for the property industry?
The construction and property industries are reliant on both EU and non-EU workers during the development and building process, meanwhile it’s also sensitive to fluctuations in the pound which influences the cost of raw materials. With Brexit on the horizon regardless of which political party emerges victorious, the effects on employment figures are hazy. It’s a waiting game.
Additionally, whichever party wins the election, rising staff costs are coming, either via the increase in the Immigration Skills Charge or an enforced rise in the living wage. There’s a flood of momentum across all parties to stamp out zero-hour contracts, with moves to ensure these employees are entitled to the same benefits as permanent, full-time employees. This will impact developers who can tend to have flexible employment arrangements with staff depending on projects and seasonality.
What else?
Unfortunately, although many pledges will affect those operating in the property and construction sectors, parties haven’t directly addressed the private property sector and developers in their manifestos. Whilst many parties have addressed the issue surrounding social housing, many of the problems in the private sector have gone unnoticed.
In conclusion, it’s clear that all the main parties are trying to secure the votes of SME business owners which in turn have potential to affect property and construction SMEs. Whilst some of the proposed policies will be welcome if they ever make it into law, others will not be. However, it will only then become clear as to whether the winning party is truly committed to its pledges, after the election. Time can only tell if promises become actions.