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I CONSERVATIVES
It is difficult to detail a large number of new policies, as the Government has had 17 years to carry out its programme of change and has been accused lately of being bereft of ideas. However, since March 1996 the Government has introduced a new charm offensive. Late payment of debt is on the Government's agenda. Via a Treasury review, the Government will try to pay its bills on time. The Government will also ask local authorities to do the same. Meanwhile, the Lord Chancellor will review the legal process with a view to improving court procedures and the enforcement of debts. The Prime Minister has put his weight behind the idea that companies should reveal their payment policies. However, the Government has not come out yet either for or against a statutory right to interest.
Funding is another area for Conservative discussion. In particular the Government has, according to President of the Board of Trade Ian Lang, "undertaken work to encourage small firms of the benefits of using finance from sources other than banks", namely equity capital and business angels.
The Conservatives propose continued sup
port for businesses on a day-to-day level through the Business Link programme, the centres that give advice and help to small firms. Business Links are 'one stop-shops' where information is held under one roof. This principle is to be extended to the PAYE, NIC and VAT authorities as well as for local authority planning matters.
There will be new rights in enforcement actions granted to business to help remove problems before any enforcement action is taken. Businesses will be given written notification of what action is required and why it's needed, as well as in non-urgent cases, an opportunity to make representations before enforcement.
The changes apply to health and safety improvement notices and soon they will apply to edicts from the new Environment Agency and building regulations
LABOUR
Labour are now putting detail into their proposals and this started with a document launched at a joint conference of the Labour Party and the Industry Forum in March 1996.
Labour are pleased the banks have moved away from short-term overdraft lending, and were pleased when the Government introduced in 1982 the Small Firms Loan Guarantee Scheme. However, they claim the SFLG is woefully underfunded, so they plan a review of the SFLG to make sure it's "operating effectively". There is also a proposal to make it more attractive by insuring borrowers for up to half of the money injected into a business, which will be financed by taking a small slice of a business's profit.
Allied to this, Labour, through its Regional Policy Commission, wants to let the rural development agencies work with venture capital to help beat the problems faced by small businesses when they seek funding.
Labour claim the Business Links are also underfunded and lacking in quality Labour propose to reform the programme by enabling business es to access all Government services through Business Links; refocusing help offered to cover more specialised subjects that include financial advice and management training.
As for deregulation, Labour want to make it a small business focused opportunity. They want to minimise the burden of form filling. Like the Conservatives, they would create single information points for those enquiring about regulations and the like. Likewise, PAYE and NIC will he revised to make them simpler.
Late payment of debt is slated by Labour. They will ensure that Government pays all bills within 30 days, with reports on those agencies that fail this target going to the National Audit Office and the Public Accounts Committee. Large companies will be required to publish their payment practices and a British Standard on late payment would he further encouraged. Putting their heads on the block, Labour will remove the incentive to pay late by giving businesses the right to statutory interest.
For those businesses in trouble, Labour will introduce the right for small firms to legal protection so that the business has a breathing space. At the same time, central
and local gov
ernment agencies will, via a Code of Practice, be required to help a business out of its troubles rather than automatically force it into liquidation.
Information on what the Liberal Democrats offer business comes primarily from a document called Investment, Partnership and Sus-tat-nubility,
Like Labour and the Conservatives, the Liberal Democrats recognise the importance of the small and medium size businesses. And likewise, they note that these businesses lack sources of start-up funding as well as equity finance for future growth and development. To counter this, Liberal Democrat policy states that they intend to work with the banks to find new sources of funding, including equity capital and the development of mutual guarantee schemes.
They will also establish codes of practice for the banks to use with their business customers which will include the requirement to tell businesses of any additional charges that they may face. On a similar tack, the powers of the Banking Ombudsman will be extended. But how, they do not say.
Taxation also gets Liberal Democrat attention. In particular, the burden of tax administration will be reduced through the integration and simplified payment of PAYE and National Insurance Contributions. VAT rules will be made less harsh for any businesses that breach the threshold for registration. Also, measures will be taken to change the bias contained within the tax system that favours loan finance instead of equity finance. Finally, Liberal Democrat plans include a proposed tax allowance of £200,000 per company per year, which will be of greater relative value to the smaller company.
Late payment of debt is not left out, Liberal Democrats say that like Labour, they will legislate to give companies the right to interest on late debts while also requiring companies to publish data on their payment record in their annual reports.
Regionally, the Liberal Democrats want to make local and regional authorities more responsible for the development of industry and commerce in their areas in three ways. First they will create regionally based development agencies that will amalgamate the present governmental, local authority and education and training bodies that operate in given areas—the `one.stop shop idea', Second, a new pool of regional funding will be developed for administration by the new regional agencies. And third, banks will be encouraged to create regional sub-banks.
by Adam Bernstein The Conservative Party: 0171 222 9000 The Labour Party: 0171 701 1234 Liberal Democrats: 0171 222 7999