Small firms urgently need post-election certainty, warns business group
While remaining politically neutral, the small business support group had hoped one party would win an overall majority in order to secure swift economic recovery.
However, with the election result creating an uncertain outcome, the Forum is calling for MPs to put aside their differences and create a functioning administration as soon as possible.
The Forum believes small to medium-sized enterprises (SMEs) are crucial to Britain’s economic recovery, with the potential to create jobs and spearhead innovation. But the not-for-profit organisation is concerned that the uncertainty and confusion caused by a hung Parliament will jeopardise this and hamper business owners’ attempts to plan ahead.
Recent Forum research found that almost three quarters (70%) of small business owners were already finding it difficult to plan for 2010, even before this morning’s general election result. With a hung Parliament potentially threatening to hold up tax and spending proposals aimed at tackling Britain’s record deficit, this uncertainly is likely to increase further.
Forum chief executive Phil Orford said: “I expect many smaller businesses will be disappointed that the election has resulted in a hung Parliament.
“However, the outcome can’t be changed so it is vital that the newly-elected MPs put aside party politics and work together to come up with a credible system of governance.
“With the economy still in a very precarious state and a mountain of public debt to be tackled, businesses owners need our elected representatives to move away from inter-party point-scoring and show political responsibility.”
Mr Orford added: “Small businesses are the lifeblood of UK Plc. I would urge all the political parties to do everything they can to come to a swift, workable consensus in order to secure the prosperity of Britain’s SMEs and the wider economy.”
The Forum has already set out what it thinks the priorities for the new Government should be in its election manifesto, which has been circulated among prospective MPs and policymakers.
Those priorities are:
• Free enterprise
The Forum believes that the greatest drivers of growth in the UK economy will come from small businesses, with new ideas borne in rapidly changing sectors and developed at a speed that traditional models of government spending will not have the agility to support.
• Fiscal responsibility
Securing the UK’s reputation as a good place to do business will mean bringing Britain’s finances under control. That will mean a combination of smart taxation and smarter cuts to public spending.
Whichever party is elected, the Forum believes that any drastic cuts to government programmes and initiatives should be balanced out with the need to ameliorate the damage of the recession. Put simply, there should be a continuity of support that goes beyond party politics.
• New technologies, new markets
As new technologies develop and new markets open around the world, there should be equal opportunities for small businesses to develop new business models in innovative ways.
The Forum is also calling on the new Government to completely scrap the planned rise in National Insurance Contributions. The Conservatives have pledged to cut that rise in half but the Forum is arguing that it should be dropped completely to avoid taxing employment as the economy heads out of recession.
The Forum’s Tax and Budget Member Panel recently found that 68% of small businesses feel that the tax burden is already unfair for small employers and 65% said that taxes overall are a serious problem for their business.