Ed Davey says Tories show utter disregard for small businesses and calls for tax cut

It is Small Business Saturday. Writing in City AM, Lib Dem leader Ed Davey says the Peppa Pig episode showed that Boris Johnson does not take the business community seriously. He says small businesses need help fast and calls for tax cuts which would benefit the smallest companies by an average of £5,000 each. He also wants the Employment Allowance to be quadrupled to £16,000, allowing a small business to employ five people without national insurance contributions.

Businesses have been through hell and back over the last two years. From on-off lockdowns to a botched trade deal with the EU…

With the Omicron variant creating a new cloud of uncertainty that is hanging over our economy, businesses are facing a looming winter of discontent… Businesses need help, and they need it fast…

Boris Johnson’s Conservatives have shown utter disregard for small businesses. Their answer to small businesses’ woes is not to provide them with more support, but to hike their taxes…

The Liberal Democrats are calling on the Government to immediately give small businesses the tax cut they deserve. This would mean over one million of Britain’s smallest businesses would see their taxes slashed by an average of £5,000 each…

By quadrupling the Employment Allowance to £16,000, a small business could employ five people without paying a penny of national insurance contributions.

I have heard from many business owners that Boris Johnson’s now infamous Peppa Pig speech at the CBI was an eye opener for them. It showed that this is a prime minister who doesn’t take the concerns of the business community seriously, and is more concerned with cracking jokes than solving problems…

The stark truth hitting home for many employers is that under Boris Johnson, the Conservatives have given up on being the party of businesses. Someone has to speak out for the small business owners and entrepreneurs who form the backbone of our economy. That starts with demanding a tax cut for small businesses right now, before it is too late.

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  • Trevor Andrews 4th Dec '21 - 7:58am

    Now that is a good response to the situation. Quantified, specific ideas on how to solve an issue. So often we criticise and say “something needs to be done” but not clear what we would do. Thank you Sir Ed.

  • Brad Barrows 4th Dec '21 - 2:14pm

    @Trevor Andrews
    That is half a response, but will only have credibility when the other half is delivered simultaneously. So, Ed, I have no disagreement with your proposal, but please explain how the £5Bn cost of the proposal will be paid for – will it be cuts elsewhere? Will it be some other taxes increasing? Will it be extra borrowing? Without this additional detail, people will believe – with some justification – that this is little more than a stunt by a minor party that realises it can call for anything in the knowledge it will never have the power to deliver. I really would hope for greater ambition than this so expect costed, credible proposals, in future.

  • Tax reform should be an increasingly important element of LibDem policy going forwaed. Martin Wolf writes in the FT We must accept higher taxes to fund health and social care
    ” The country has still not recognised the long-term need to accept rising taxation in order to deliver the services people will demand. There is no realistic alternative. The government has however recognised the need to manage the immediate pressures. The problem is that its solutions are dreadful. They may work politically, but they are morally and intellectually indefensible.”

  • @Brad Barrows
    “That is half a response, but will only have credibility when the other half is delivered simultaneously. So, Ed, I have no disagreement with your proposal, but please explain how the £5Bn cost of the proposal will be paid for”

    Much will be paid for by having people in work and thus paying (some tax) and spending (paying some more tax).
    But yes, we do need to think more clearly about small businesses, so that like people they get certain ‘personal’ allowances, instead of having to deal with the full weight of the tax system when taking on their first few employees.
    Even more so, given “Making Tax Digital” is also increasing the overheads on small businesses.

  • Paul Johnson of the IFS published an article on the self-employed It’s time we stopped treating the self-employed as an afterthoughtconcluding:
    “The pandemic has shown us the power of the state to intervene in hitherto unimaginable ways in supporting employees. But it has also shown us that the self-employed remain something of an inconvenient afterthought. We need a new settlement that recognises the increasing role of self-employment in the economy and society, a settlement that treats all fairly, irrespective of whether they are formally employees or self-employed. It should involve a levelling up in tax liabilities and an end to the absurdity of fiscal incentives that favour one group over another. It should bring in automatic enrolment for the self-employed. It requires an urgent review of what went wrong over the past 18 months and a clear strategy for how to deal with a similar situation in the future. We can’t go on treating one in seven of the workforce as somewhere between an afterthought and an inconvenience.”

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