The Federation of Small Businesses (FSB) today welcomes the new coalition Government formed by the Conservative Party and Liberal Democrat Party, 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, thus 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 Federation 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.
John Walker, National Chairman of the Federation of Small Businesses said,
"The Federation of Small Businesses welcomes the certainty that the Coalition Government provides to businesses and the markets and looks forward to working with the new Government ministers. While compromises have been made, the policies laid out will help to safeguard business confidence allowing it to support further economic recovery.
"We are pleased that coalition negotiators have listened to the business community and plan to reverse the proposed one per cent increase in NICs for employers. A healthy increase in personal tax thresholds is something that FSB has been urging for some time. This will not only provide more disposable income for the lowest paid workers, but will also encourage businesses to take on more staff."
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