Conservatives launch their Plan for Business

Conservatives have today (Thursday 27^th June) set out their Plan for Business, with a package of tax cuts and business support measures designed to unlock investment and growth. 

It comes on the day the Business Secretary will warn of the Labour threat to business in a speech at the British Chambers of Commerce's annual conference.  

She will say: "The Conservatives have a plan for a future where hard work and doing the right thing are rewarded, not punished with higher taxes, or discouraged with unconstrained welfare.  

“We celebrate aspiration and opportunity. We recognise that innovation and competition are the powerful forces that bring us prosperity and lift living standards. 

"For Labour, on the other hand, private business is just a vehicle to pursue their political objectives - a managed economy, heavily regulated, heavily taxed and weighed down by trade union demands." 

The Conservative plan for business builds on the party's strong track record of supporting small businesses in government and follows a stark warning about the impact of Labour's proposed union laws from a leading independent think tank.  

The IFS has slammed Angela Rayner's proposed French-style union laws, saying they would discourage employers from hiring and training up younger recruits and leave bosses unable to move on unproductive workers. The IFS also criticised Labour's plans to reduce flexibility for bosses and employees, saying it would dent employment and increase uncertainty for workers. 

The Conservatives' comprehensive Plan for Business includes: 

1. Extending the highly successful ‘full expensing' policy to leasing 
2. Retaining key tax incentives that encourage small businesses to grow 
3. Abolishing the main rate of self-employed national insurance contributions 
4. Pushing forward a business rates support package, worth £4.3 billion over the next Parliament 
5. Keeping the VAT threshold under review, after they raised it to £90,000, and explore options to smooth the cliff edge at £90,000 
6. Taking more companies out of the scope of burdensome reporting requirements 
7. Completing Free Trade Arrangements with India and the Gulf Cooperation Council, US states and pursue even more across the globe 
8. Increasing public spending on R&D to £22 billion a year, up from £20 billion this year 
9. Pushing forward the Advanced Manufacturing Plan, worth £4.5 billion 
10. Distributing £1.6 billion of funding across the country by 2028 to support innovation 

The Conservatives have a strong track record in supporting businesses. Their record includes:  

1. Introduction of full expensing, which has been the ‘single most transformational' measure for growth and investment. 
2. Smarter Regulation approach which has already saved 50 million hours of administrative time for business, saving them an estimated £1 billion.   
3. Removing thousands of EU regulations from the UK's statute books 
4. Making Britain the fourth largest exporter in the world 
5. 28,000 small businesses have been taken out of paying VAT altogether by raising the VAT registration threshold to £90,000 
6. Transforming digital infrastructure by covering 80 per cent of the country in superfast fibre optic broadband through project gigabit 

On the other hand, the Labour Party has offered slim pickings for business while putting forward a radical package of business regulations. Labour's ‘New Deal for Working People' will see a ‘regulator with teeth' take on small businesses who don't take on their 70 ‘French-style' union laws. 

Kevin Hollinrake, Small Business Minister, said: 

“Small businesses are the backbone of the UK economy and I'm proud of the Conservative government's record supporting them through some of the tough times of the last few years. 

“And we will go even further. Our clear plan will turbocharge growth and productivity across the country. However it's clear other parties don't hold our vital small businesses in the same esteem. Labour's proposals will shackle businesses with French-style punitive regulations and new, aggressive enforcement bodies, all of which will result in more red-tape, more tribunals, and lower growth.  

“I am delighted small businesses are welcoming our approach. They understand how effective these measures will be to create a secure future for them, their families, and our country.” 

ENDS 

For further information, please contact the Press Office on 020 7984 8121 or email us at press@conservatives.com.  

Notes to Editors 

Our plan 

Measures taken to support business are outlined in the Conservative and Unionist Party Manifesto 2024 (link) 

Our Plan: 

• We have already taken action to protect the high street. In 2021 the then Chancellor Rishi Sunak introduced a one-year 50% business rates discount for businesses in the retail, hospitality, and leisure sectors to help those businesses hardest hit by the pandemic (Autumn Statement 2021). In 2022 government extended and increased the Retail, Hospitality and Leisure relief scheme from 50% to 75% for 2023-24. This was an estimated £2.1 billion tax cut for 230,000 business properties (HMT, Autumn Statement 2022: Business Rates Factsheet, 17 November 2022, link). 
• We have previously taken steps to address the ‘Bricks v Clicks' tax imbalance. At Autumn Statement 2022 government permanently removed 'downward caps', a longstanding ask from business representative organisations. This helps to address the tax burden imbalance between online retailers and bricks and mortar sales. As a result, total business rates paid by the retail sector were estimated to fall by 20%, but estimated to rise 27% for large distribution warehouses to reflect the growth in the online sales sector (HMT, Autumn Statement 2022: Business Rates Factsheet, 17 November 2022, link). 
• We will keep business rates under review and, over time, we will look to continue this approach, easing the burden of business rates for high street, leisure and hospitality businesses by increasing the multiplier on distribution warehouses that support online shopping.  
• The Valuation Office Agency has, for each property (known as ‘hereditaments') on the non-domestic rating list, a ‘Primary description' and a ‘Special Category' (SCat) Code (Valuation Office Agency, Official Statistics - Background Information, 15 September 2022, link). This would make it possible to apply different (lower or higher) business rates multipliers to different categories of hereditament. A list of SCat codes is available online (link). 

Conservative record:  

• Cutting business rates to support small businesses, strengthening local economies and meaning more people have opportunities closer to them. We have frozen the small business multiplier yet again, saving an average shop £1,650 and we have extended the Retail Hospitality and Leisure Relief for a year which supports businesses most commonly found on the highstreets such as shops and pubs building on our £14 billion package of support since 2020 (HM Treasury, Autumn Statement 2023, 22 November 2023, link). 
• We extended the 75% business rate relief for eligible retail, hospitality and leisure properties for 2024-25, a tax cut worth £2.4 billion (HMT, Budget 2024, March 2024, link).  
• The UK has a large and dynamic SME population, accounting for three-fifths of employment and around half of turnover in the UK private sector (DBT, Business and Trade Facts and Figures, April 2024, link). 

Labour's plan 

Labour have published a document in an attempt to water down their French-style union law commitments. The truth is nothing has changed.   

• Labour remain committed to ‘include basic individual rights from day one for all workers'. ‘Our New Deal will include basic individual rights from day one for all workers, ending the current arbitrary system that leaves workers waiting up to two years to access basic rights of protection against unfair dismissal, parental leave and sick pay' (The Labour Party, Labour's Plan to Make Work Pay, May 2024, link). 

• Labour remain committed to repealing the Trade Union Act and minimum service legislation . ‘Over the past 13 years, the Conservatives have consistently attacked rights at work, including through the Trade Union Act 2016, the Minimum Service Levels (Strikes) Bill and the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 – all of which Labour will repeal to give trade unions the freedom to organise, represent and negotiate on behalf of their workers' (The Labour Party, Labour's Plan to Make Work Pay, May 2024, link). 

• The Trade Union Act requires unions to achieve a 50 per cent turn out for strike ballots and tougher thresholds for key public services. The act requires unions to achieve at least a 50 per cent turnout of eligible union members, with a majority voting in favour of strike action. In important public services –including in the health, education and transport sectors – an additional threshold of 35 per cent must be met (BEIS, Press Release, 1 March 2017, link). 

• The Trade Union Act ended union's ability to launch a strike well after the ballot date. The Trade Union Act requires unions to strike within six months of a ballot date, and ensure strikes cannot be called on the basis on ballots conducted years before (DBT, Statutory guidance, 24 February 2017, link; Backhouse Jone, The Trade Union Act, 16 April 2024, link).  

Labour's policy would cost billions of pounds of taxpayer's money: 

• Policy Exchange estimate Labour's sectoral bargaining reforms to cost an annual £4.2 billion in increased council tax bills. Policy Exchange estimated, because half of social care spending is funded through the public purpose via the social care precept, Labour's calls for increased pay and collective bargaining across the sector could cost an additional £4.2 billion in council tax bills (Policy Exchange, One size fits all, 12 May 2024, link).  

• Costing businesses £41 billion every year, equivalent to £1,250 per employee, making it more expensive to hire new workers and expand. Labour's French-style union laws will cost British businesses £41 billion in increased costs a year or £205 billion across five years, equivalent to £1,250 per employee, costing businesses like Tesco £375 million a year (The Daily Telegraph, 24 May 2024, link; The Sun, 24 May 2024, link). 

Business leaders say Angela Rayner and the unions' new regulations will damage the economy: 

• Stuart Rose, Chairman of Asda, said Labour should be ‘very, very careful' about introducing day one rights. STUDIO: ‘We've got a bit of a dead plan when it comes to employment rights, giving workers rights to things like parental leave, six pay from day one. Is that something you welcome? Is that something that's a cause of concern?' ROSE: ‘It's something that I would say be very, very careful about what they plan to bring in because we do have one huge benefit in this country that we've got, you know, fairly flexible labour laws, but they protect, they do give a significant protection to employees, but they give flexibility to employers. And we must make sure that we do isn't retrograde Sophy, because, you know, business needs help and that's what it needs at the moment. The costs have gone up dramatically and wages quite rightly has gone up. But at the end of the day now the inflation has come down, which is a good thing. It puts a squeeze. And business to be successful in the environment that we live in has to produce profits' (Sky News, 17 April 2024, archived).  

• Alex Baldock, the head of Currys plc, said the New Deal for Working People could result in less business investment. ‘Baldock warned that the party's plans to reform workers' rights could result in less business investment. “The more restrictions that you put in place, the less flexibility you allow in businesses' relationships with their colleagues, the less likely businesses are to hire and the less likely they are to invest”' (The Times, 25 March 2024, link).   

• Matthew Percival, a director at the CBI, said that CBI ‘members do have areas of concern' regarding Labour's new deal for workers. ‘We want to work with Labour to ensure that these measures do not result in unintended consequences for businesses that adversely affect their ability to grow and take on new staff … our members do have areas of concern' (The Times, 15 February 2024, link). 

• Rupert Soames, President of the CBI, said Labour's workers' rights promise could lead to ‘unintended consequences'. Soames warned of the ‘unintended consequences' of the policy and ‘the “European model” of stronger worker rights was “really good for people who are employed but really bad for people who are unemployed because companies are terrified to take them on”' (The Financial Times, 6 February 2024, link).  

• Archie Norman, Chairman of M&S, warned against Labour's promise that ‘reduce flexibility' within the workplace. Commenting on Labour's New Deal for Working People, Norman stated: ‘any incoming government should consider carefully whether a package that reduces flexibility, makes it more costly to hire people, and seeks to bring unions back into the workplace will help attract new investment' (The Daily Telegraph, 13 April 2024, link).  

• The Financial Times said that Labour's plan to strengthen the unions under its new deal for workers is prompting a ‘deep unease among business leaders'. ‘Labour seeks to strengthen the role of unions in workplaces … prompting deep unease among business leaders' (Financial Times, 26 February 2024, link).