What the major party election manifestos mean for business
Greater Birmingham Chambers of Commerce
Brexit remains the dominant issue at this election and it is vital that all three of the main parties find a solution to this complex problem and end the uncertainty that has hung over the British economy for the past three years, hampering investment and sapping business confidence. Whilst we welcome Boris Johnson’s determination to reach an agreement with the European Union, it is important that the process is not held to ransom by an arbitrary deadline and therefore it is quite concerning that the Conservative Party has rejected the possibility of extending the transition period in their manifesto given that most trade deals are complex and take a number of years to negotiate. It is essential that businesses do not face a cliff edge Brexit at the end of 2020 and are given sufficient time to prepare for the new trading arrangements with the EU. The new immigration system must also be fit for purpose and not restrict businesses from accessing the skills and talent they need.
There is a stark difference between the spending plans of the three major parties with Labour committing £82.9bn extra per year on day to day spending compared to £62.9bn for the Liberal Democrats and £2.9bn by the Conservatives. The Chamber welcomes the increased level of investment being proposed but it is important that the burden of repayment does not fall disproportionately on the shoulders of businesses. While the Labour Party’s plans to increase the amount of funding and support for businesses at a local level are welcome, the party must refrain from excessive state intervention at a detriment to business output.
All of the parties have committed to increase infrastructure spend and it was particularly pleasing to see the Conservatives pledge in their manifesto to invest in the Midlands Rail Hub which will strengthen rail links between the major cities across the region and provide us with the much needed extra capacity. However, it is important that the Conservatives commit to delivering HS2 in full alongside this investment to really boost the region’s connectivity and drive economic growth.
The GBCC also welcomes the sentiment amongst the three major parties on reforming the outdated business rates system but has serious concerns about the practical application of these measures on a real life basis. Whilst it is important that the next government takes action to reform this outdated tax, the new proposals must be thought through carefully with a number of bodies already raising concerns about Labour and Liberal Democrat proposals to replace it with a land value tax, given the complexity of trying to value the land separately from the buildings on it.
Furthermore the Conservatives plans tend to focus on smaller retailers whilst ignoring the fact that it’s the anchor institutions that carry the biggest burden. The offer of another review on the system also seems potentially redundant given that the Treasury Select Committee have just completed an in-depth review of the system and raised valid concerns around the level of the multiplier, the need to simplify the relief system and giving more resources to the VOA.
The next government must support businesses in adapting to the post- Brexit trading conditions and work to alleviate the burden of taxation facing businesses across the country. The GBCC would also like to see further powers devolved at a local level giving businesses across the Greater Birmingham area more of a say in the decisions that will affect them.
- Click here to find out more information on the main parties policies and what they mean for businesses.
- Click here for the Chamber’s priorities for the next Government and our city-region’s Members of Parliament
Daniel Clarke
Policy and research adviser
Greater Birmingham Chambers of Commerce