UK the Best Place for Business

Labour Policy

“Labour has taken action to support businesses during the global downturn. The priority now is to secure strong economic growth. We know that economic recovery will be driven by firms and individuals across the whole economy, competing in a diverse range of sectors and markets. It is not an option for the UK to simply stand aside and allow other countries to capture these rapidly expanding markets. It is essential that we equip businesses with the support they need to compete in an increasingly competitive globalised economy.

The UK has the lowest barriers to entrepreneurship of all OECD countries and last year was ranked fifth in the world by the World Bank for ‘ease of doing business.’ Labour’s aim is to make the UK the best country in the G20 in which to set up and run a business, and become one of the most attractive places in the world to invest.

The Business Link service, which offers comprehensive practical advice to businesses, is now offering free access to interactive tools and model documents that are quick and easy to use. This help has already saved businesses an estimated £418 million in administrative burdens in the last year.

We will make further progress in cutting the costs of regulation on growing businesses, especially the smallest. We have a new goal to cut the cost of regulation by a further £6.5 billion by 2015 – £1.5 billion in unnecessary paperwork and record-keeping, and £5 billion in the wider regulatory costs that impact upon business. We are also developing a single online process for incorporating and registering a company, aiming for delivery in April 2011. To make it quicker and easier for businesses to register commercial property, we will develop digital facilities at the Land Registry. This includes the aim to enable businesses to submit and receive registration details electronically.

To encourage entrepreneurship we will double the value of capital gains that can be made under Entrepreneur’s Relief, meaning gains under £2 million are subject to Capital Gains Tax at the lower rate of 10 per cent.

Access to finance and key financial products will be crucial to ensuring businesses are able to prosper. We will continue to widen the sources of finance available to growing businesses, including by extending the successful Enterprise Finance Guarantee Scheme until March 2011, enabling £500 million of additional bank lending to small and medium-sized enterprises (SMEs). We are creating UK Finance for Growth, responsible for £4billion of existing finance products for small and medium sized businesses, supporting businesses across the country. Included within this will be the Growth Capital Fund for which £200m of cornerstone investment has been raised so far from private sector and Government. The Growth Capital Fund will attract private sector investment into UK SMEs seeking between £2 million and £10 million.

We have also provided guarantees on lending to businesses from major banks. In January 2009, the Labour Government entered into legally binding lending commitments with the Royal Bank of Scotland (RBS) and Lloyds Banking Group (Lloyds). These commitments will remain in place until March 2011. Budget 2010 announced that Lloyds and RBS will be lending £41 billion to small businesses. And we will establish a new small business credit adjudicator with powers of enforcement to ensure that small businesses are fairly treated when applying for loans.A temporary increase in the level of small business rate relief, will mean that eligible small businesses occupying properties with rateable values up to £6,000 will pay no business rates for one year from October 2010. And for small businesses benefiting from the rate relief taper (rateable values up to £12,000) will receive significant reductions. Overall this change will benefit over 500,000 businesses across England, many by well over £1,000.

We will create an enterprise environment that gives active support to those who wish to start their own business, with a new focus on entrepreneurship skills alongside vocational and university training. The Skills for Growth strategy published in November 2009 includes measures to enable Further Education students to learn business start-up skills alongside a vocational trade. We will give earlier support to help unemployed people overcome the barriers to self employment. From early 2010, access to the Self-Employment Credit and to the provision of intensive advice and support will be available from week 13 of a Jobseeker’s Allowance (JSA) claim.

We will also provide new enterprise support for service personnel returning from conflict, including those who may have disabilities as a result of their service. The ‘Be the Boss’ enterprise scheme will assist returning service personnel who wish to set up their own business by providing loans and grants.”

Labour Manifesto

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