Queen’s Speech designed to ‘lock in growth’ amid EU uncertainty

Strong focus on business and tax legislation sets out government’s stall: but the looming EU Referendum remains a concern.

The Queen’s Speech is ‘jam packed’ with legislation and is a positive sign that the government is committed to driving further economic growth, according to CBI deputy director-general Katja Hall.

Hall and the CBI had particular praise for aspects of the Enterprise Bill for ““pruning unnecessary red tape from Westminster and Brussels”.

“[This] will give firms bursting with potential – especially small and medium-sized ones – the space to grow and thrive,” Hall added.

Federation of Small Business (FSB) national chairman John Allan echoed Hall’s views – stating that smaller businesses would be particularly pleased about the desire to “cut burdensome red tape”.

Allan also said that the FSB is pleased about the government “maintaining focus on small businesses”. He went on to say that the body’s members saw the bill as an opportunity to “address issues like the billions owed to small businesses in overdue payments”.

Both Allan and Hall welcomed the announcement of the Small Business Conciliation Service – with both expressing interest in more details being revealed in the future.

“We look forward to seeing the details of the proposed Small Business Conciliation Service and how it will address issues like late payments,” Allan continued.

>See also: Why ERP solutions are crucial for your business

“Small businesses often have the law on their side, but find accessing the legal system complex, time consuming and expensive. A properly constituted conciliation service should help with this and go some way to addressing major problems like the UK’s poor payment culture.”

Despite the speech’s warm reception from the FSB, at least one small business leader was less enthusiastic. David Benigson, CEO of media intelligence platform Signal, called it “disappointing for small business owners in the UK”.

He claimed the announcements showed that small business, and more widely the UK tech sector, “are not a priority for the new Conservative government”.

“Schemes introduced by the coalition helped make London the thriving tech hub that it is: the Knowledge Transfer Partnership funded the salary of one of our co-founders; EMI created an easy way to give our employees stock options; and EIS made raising £1.2m a good deal easier,” he said.

“We expected to hear more about Sajid Javid’s proposal to cut red tape to help us create more jobs, but there has been very little detail on this, and other politicians in his position have failed to deliver on the same promise.”

Tax Lock Bill

There was a strong focus on tax in the Queen’s Speech. The biggest announcement was the Tax Lock Bill, which means there will be no increases on income tax, NI or VAT during the current parliament.

Grant Thornton UK LLP head of tax Jonathan Riley said the news “brings some certainty for business over the next five years in terms of payroll and VAT administration”.

“However, it won’t be until the Budget in six weeks that we see what George Osborne’s position is in on wider tax; having tied his hands on NIC, VAT and Income Tax we will wait to see if there are changes elsewhere,” he warned.

>Related: Keep tax simple – declutter your business

“The Tax Free minimum wage may be a boost for all income tax payers, but businesses should bear in mind that the threshold for employer National Insurance Contributions does not change.”

Jonathan Isaby, chief executive of the TaxPayers’ Alliance, call the tax lock “a touch on the gimmicky side”. He did however say that it offered protection for taxpayers.

“It is crucial, however, that the Chancellor doesn’t quietly hike other taxes, but rather finds spending reductions to ensure we are still moving towards the goal of a balanced budget,” he added.

EU Referendum Bill

One area that all commentators agree on was the need to limit any uncertainty brought about by the EU Referendum Bill. Grant Thornton partner Paul Etherington did however welcome the fact it will “provide clarity on the timetable and process ahead”.

He went on to say that he hoped companies in the mid-market sector were not squeezed out of any forthcoming debate on EU membership.

“To date the media has reported on what ‘small firms;’ and ‘big business’ thinks but has neglected the views of our agents of growth in the mid-market,” he said.

“Over the coming months Grant Thornton will continue its important work with a further independent survey of mid-sized businesses to help give this important sector a voice in the debate.”

Further reading: The election result and small business growth

Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

Related Topics