The Conservatives have announced a number of their enterprise and economic policies ahead of the impending general election.
The Tories said they would announce an ‘emergency Budget’ within 50 days of being elected to set out a plan to stimulate enterprise and reduce the UK’s national debt.
Central to their proposals are plans to cut the headline rate of corporation tax from 28% to 25% and the small firms’ rate of corporation tax to 20%. This will be funded by “reducing complex reliefs and allowances”.
Following a deferral in 2009, the small firms’ corporate tax rate is currently due to increase from 21% to 22% in April 2011.
The Tories said they would also scrap National Insurance (NI) contributions for new businesses started in the first two years of a new Conservative government, for the first 10 employees they take on, for their first year of employment.
Overall aims include making Britain a leading hi-tech exporter in Europe through Sir James Dyson’s engineering task force, simplifying employment law and the tax system and reforming the Regional Development Agencies (RDAs).
While they “do not regard the 50p tax rate as a permanent feature of the tax system”, there are no plans to abolish it immediately.
As well as introducing tax cuts for businesses, the Conservatives also plan to reduce the budget deficit by tightening public spending as soon as possible, despite Labour's warning that any immediate action would risk tipping the economy back into recession. In the Pre-Budget Report, chancellor Alistair Darling said steps would not be taken to cut public spending until 2011.
However, Conservative leader David Cameron said “doing nothing” about the national debt risked damaging the UK’s long-term competitiveness, while in the meantime rising interest rates and faltering confidence could plunge the country into a “deeper and darker” downturn.
He said: “On our side we have a growing number of not just economists but also business people like Richard Branson and frankly half the country’s retailers who never stop telling me that the government has to get to grips with its own finances.”
Cameron said stimulating enterprise would be central to kick-starting the recovery.
“To get our economy growing, we’ve got to do more than just deal with the deficit with early action and a proper plan, we’ve got to get this economy moving again and get people investing again.
“That is why we’re going to unleash enterprise again in this country. I want a really clear message to go out, that Britain is open for business again.”
© Crimson Business Ltd. 2010