Labour lays out pledges for contractors

Wednesday 15 April 2015

As next month’s general election draws ever closer, contractors will be keen to know how each of the political parties plan to support entrepreneurs and small businesses. Today (April 14th), the Labour Party published its 2015 election manifesto, allowing the electorate to fully scrutinise their proposals and promises before they cast their vote on May 7th.

As might be expected, this 84-page document contains a number of commitments that should particularly interest those who are self-employed, run small businesses, or work as contractors or sole traders.

Although many of the promises have already been announced by the party over the previous months and years, the publication of the manifesto gives them more weight, as well as allowing voters to see what has made the cut and what has been quietly left out.

The party itself decided to frame its manifesto as a pro-small business document, with leader Ed Miliband saying that he was “ready to put into practice the truth that it is only when working people succeed, that Britain succeeds”.

This was contrasted with an attack on “the tired old idea that as long as we look after the rich and powerful we will all be ok”, which could mean further tax hikes and restrictions on big businesses in the future.

Most notably, Labour has pledged to raise the minimum wage to £8 per hour by October 2019. While this does not directly affect the self-employed, it’s certainly something that would have to be taken into consideration when it comes to setting your own rates.

The manifesto also promises that the party will maintain the “most competitive corporation tax rate in the G7, cutting and then freezing business rates for more than 1.5 million small business properties and freezing their energy bills”.

Furthermore, the party intends to set up a British Investment Bank, which would be a government-owned enterprise for lending to small to medium-sized enterprises (SMEs), as well as providing support to regional banks.

Labour’s commitment to ensuring the UK returns to “a leadership role” in a reformed EU is unsurprising, although it may be a factor for contractors with foreign clients, or those with a multinational presence.

Reacting to the news, John Cridland, director-general of the Confederation of British Industry, told the BBC: "Labour's manifesto includes a number of proposals that are positive for business, including remaining within a reformed EU, establishing an independent infrastructure commission, and focusing on skills. But market interventions in labour and other specific sectors, together with signals on corporation tax, are a cause for concern."

However, high-earning contractors should also be aware that Labour plans to reintroduce the 50p income tax rate for those who earn £150,000 or more, which could have a negative impact on take-home pay for some.

Looking to the future, the party has promised to ensure that all young people leave education with the skills needed for success in adult life. If this commitment is met, it could mean a growing number of people who are suitable for self-employment in their chosen field.

By Victoria McDonnell

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