FSB welcomes the coalition command
May 20, 2010
The Federation of Small Businesses (FSB) welcomes the new coalition Government formed by the Conservative and Liberal Democrats, and congratulates David Cameron on becoming the UK’s new Prime Minister and Nick Clegg as the new Deputy Prime Minister.
The coalition will provide certainty for businesses and the stock market. The FSB welcomes the fact that both parties have made compromises to attempt to safeguard business confidence.
On the specific policies agreed by the coalition, the FSB welcomes the reversal of the one per cent increase in employers’ National Insurance Contributions (NICs), and is pleased that capital gains tax proposals for businesses will not be changed, therefore encouraging serial entrepreneurship.
The adoption of the Liberal Democrat policy to raise the personal tax allowance to £10,000 as a long-term goal is also welcomed. The FSB has lobbied for an increase in personal tax allowances as a way to encourage people into work and to give the lowest-paid workers more money in their pay packets.
In a recent FSB-ICM poll, 40 per cent of respondents said they would be in favour of an increase in the personal tax threshold.
While the Enterprise Finance Guarantee scheme has worked well, the FSB is pleased to see that the coalition is discussing the possibility of a national loan guarantee scheme to get more credit flowing to smaller businesses. There are still concerns with bank lending and so tough targets for this is also a welcome recommendation.
Nicky Goringe Larkin, who chairs Reading and West Berkshire FSB, said: “We are delighted that what will hopefully be a strong coalition Government has been formed, after the uncertainty of a hung Parliament.
“However, many of our members will be delaying decisions until the outcome of the anticipated new budget. Our members will be watching carefully that the benefit that they currently enjoy of a reduced rate of capital gains tax (CGT) – via entrepreneurs relief – is not threatened by the proposed increases to CGT when they ultimately sell their businesses, which is often when they wish to retire.
“In addition, the buy-to-let market has suffered greatly during the recession, and an increase in CGT could cause this market’s recovery to be delayed. We look forward to continue working with our local conservative MPs on member issues, and welcome Alok Sharma as the new MP for Reading West, who has already been working with us for some time.”