Small and medium businesses are at the heart of the local economy across the Devizes Constituency and I am passionate about helping them thrive. I am proud of the Government’s record in supporting small businesses and of the ambition of its Industrial Strategy to go further and back them to the hilt. I enjoy meeting with local business owners and their staff, and I am constantly amazed at the breadth of industries successfully trading in the local area. I believe the best way to support business is through a strong, stable economic climate that supports investment and growth. The decision taken to prioritise high value infrastructure and innovation will support businesses across the UK. This includes increasing investment in local roads and digital connectivity to help rebalance the economy.
I am also a huge support of apprenticeships for young people as a great way to start a career, and to be ‘earning whilst learning’. It’s fantastic that locally there have been over 12,000 apprenticeship starts since 2010 and nationally, between 2010 and 2015 we saw the biggest ever increase with over two million people starting an apprenticeship. The Government has set a commitment to going further and delivering three million more apprenticeships by 2020 and have been delighted to do my bit to support this. I have been doing my bit by taking on two local young people from the Constituency to undertake Business Administration Apprenticeships in my local office. I’m especially pleased that having completed her Apprenticeship, that Georgia Mundy, a former student at St John’s, Marlborough, has now secured a permanent role in my Westminster office, showing the value of apprenticeships in helping people get the careers they want.
Since 2010, the Government has put a business-led recovery at the heart of its plan, cutting Corporation Tax from 28 per cent to 19 per cent. I know how much businesses value certainty and stability, and that Corporation Tax will fall to 17 per cent, by far the lowest in the G20, and a further business rates reduction package will be implemented. This will take 600,000 small firms out of the rates system altogether and, along with the increase of the Rural Rate Relief, mean lower bills for many thousands more. Alongside this, the Government has committed to the biggest increase in R&D spending in 40 years, while UK export finance capacity will be doubled to make it easier for British businesses to export and reach new markets.
- There were a record 5.5 million private sector businesses at the start of 2016. This is an increase of 97,000 since 2015 and 2.0 million more since 2000.
- Small businesses accounted for 99.3 per cent of all private sector businesses at the start of 2016 and 99.9 per cent were small or medium-sized (SMEs).
- Total employment in SMEs was 15.7 million; 60 per cent of all private sector employment in the UK.
- The combined annual turnover of SMEs was £1.8 trillion, 47 per cent of all private sector turnover in the UK.
- In 2016, there were 1.3 million employing businesses and 4.2 million non-employing businesses. Therefore, 76 per cent of businesses did not employ anyone aside from the owner.
- SMEs account for at least 99 per cent of the businesses in every main industry sector.
- The UK now has the joint lowest rate of corporation tax in the G20 and will have the lowest by 2020. These new cuts will save small and large businesses a further £6.6bn by 2021 and will benefit 1.1 million businesses.
- Taxes on business investment have been virtually abolished for most businesses. The annual investment allowance was permanently set at £200,000 from January 2016. This represents the highest ever permanent level.
The Government recognises that business rates represent a higher fixed cost for small businesses and as of 1 April 2017, for half of all properties – 600,000 smaller properties – it will:
- Permanently double Small Business Rate Relief (SBBR) from 50 per cent to 100 per cent and increase the thresholds to benefit a greater number of businesses. Businesses with a property with a rateable value of £12,000 and below will receive 100 per cent relief. Businesses with a property with a rateable value between £12,000 and £15,000 will receive tapered relief. 600,000 small businesses, occupiers of a third of all properties, will pay no business rates at all – a saving worth up to £5,000 in 2017-18. An additional 50,000 will benefit from tapered relief.
- Increase the threshold for the standard business rates multiplier to a rateable value of £51,000, taking 250,000 smaller properties out of the higher rate. This will reduce business rates for many small businesses – including some high street shops.
- The inconsistency between rural rate relief and small business rate relief has been removed by doubling rural rate relief to 100 per cent.
- Support for small businesses losing Small Business Rate Relief to limit increases in their bills to the greater of £600 or the real terms transitional relief cap for small businesses each year.
- Providing English local authorities with funding to support £300 million of discretionary relief, to allow them to provide support to individual hard cases in their local area.
- The Government has also introduced a £1,000 business rate discount for public houses with a rateable value of up to £100,000, subject to state aid limits for businesses with multiple properties, for one year from 1 April 2017.
- The Government is bringing forward a planned switch from RPI to CPI by two years, to April 2018. This is worth £4.3 billion in reduced business rates over five years and comes alongside new measures which will improve the fairness of the system.
- Ministers have also listened to the concerns expressed about the five yearly revaluation system and therefore, future revaluations will take place every three years.
Helping Businesses to Take On Staff
- The Employment Allowance gives every business and charity a cash-back on jobs by reducing their employer National Insurance Contributions (NICs) bill each year. This allowance increased to £3,000 (up from £2,000) in April 2017.
- Employer National Insurance has been abolished for under-21 year olds on earnings under £813 per week (£42,285 per year) as of last year. This has significantly reduced the cost of employing young people by making it over £500 cheaper to employ an under-21 year old earning £12,000 and over £1,000 cheaper to employ an under-21 year old earning £16,000.
- As of 2016, employer National Insurance Contributions for apprentices aged under 25 have been abolished on earnings up to the upper earning limit. This means employers of around half a million apprentices are exempt from paying employer national insurance.
Access to Finance
- British Business have supported more than £8.5bn of finance to more than 54,000 businesses.
- As announced at Autumn Budget, the Government will support businesses to get the finance they need by extending the British Business Bank’s Enterprise Finance Guarantee to March 2022 and expanding the programme to support up to £500 million of loans per annum.
- Funded through the British Business Bank, the Start Up Loans Company offers fixed rate loans of up to £25,000 and also provides access to free business support for people starting out for the first time in business.
- Start Up Loans generate a return on investment to the economy of £3 for every £1 spent and since 2012, Start Up Loans worth a quarter of a billion pounds have been agreed.
- The Enterprise Finance Guarantee programme, which supports firms that lack a sufficient track record or collateral to access the finance that they need, has also been extended until at least 2018.
The Government will work with businesses, lenders, insurers, the British Business Bank and the Intellectual Property Office to overcome the barriers to high growth, intellectual property-rich firms, such as those in the creative and digital sector, using their intellectual property to access growth funding.
- The Prompt Payment Code now promotes 30-day terms as standard with a 60-day maximum limit and unless signatories can prove exceptional circumstances for longer terms they will be removed from the Code.
- New rules have been introduced to force the UK’s largest companies to publish their payment terms giving businesses league tables of late payment performance to identity companies with the best record.
- A Small Business Commissioner will also be appointed to give advice and support on payment issues. The Government will shortly consult on how the Commissioner will operate and handle complaints from small businesses.
In November, the Government launched its Industrial Strategy white paper, setting out its long-term vision for how Britain can build on its economic strengths, address its productivity performance, embrace technological change and boost the earning power of people across the UK. The white paper follows extensive engagement with industry, academia and business bodies who responded to the green paper consultation earlier this year. The Government has identified four Grand Challenges, or global trends which it states the UK must embrace to ensure it harnesses all the opportunities they bring. They 4 are:
- Artificial intelligence: putting the UK at the forefront of the artificial intelligence and data revolution.
- Clean growth: maximising the advantages for UK industry from the global shift to clean growth.
- Ageing society: harnessing the power of innovation to help meet the needs of an ageing society.
- Future of mobility: becoming a world leader in the way people, goods and services move.