Tories and Labour go all out to woo SMEs and freelancers

Written by: Rachel Miller

Date: 11 June 2024

Keir Starmer and Rishi Sunak

The Conservative Party has pledged to scrap the main rate of National Insurance for the self-employed by the end of the next Parliament. Meanwhile, Labour Party plans for supporting small firms include replacing business rates and cracking down on late payments.

The Conservative Party manifesto, launched today, includes a pledge to abolish National Insurance for the self-employed by the end of the next Parliament. Employee National Insurance will also be cut by 2p.

The Association of Independent Professionals and the Self-Employed (IPSE) has praised the announcement. Derek Cribb, ceo of IPSE, said"The prime minister is right to reward the millions of risk-takers in our workforce by scrapping their national insurance. By freeing them from the burden of calculating and paying a second tax on work, the Conservatives would be giving the self-employed sector a much-needed shot in the arm and renew the nation's desire to strike out on their own."

However, he also warned: "Hundreds of thousands more self-employed company directors will not feel the benefits of this landmark tax pledge. If his aim is to back the self-employed, [the prime minster] should ensure that limited company freelancers are supported with equivalent pledges before polling day."

What would Labour do for small businesses?

Ahead of the publication of its manifesto, Labour leader Keir Starmer has outlined Labour Party proposals for supporting small businesses. Labour plans include "new legislation and regulatory reforms designed to significantly benefit small businesses". A Labour government would:

  • Accelerate the rollout of banking hubs to give small firms access to banking services on the high street.
  • ⁠Replace the business rates system with a system that will "level the playing field between the high street and online giants".
  • ⁠Introduce town centre police patrols to tackle anti-social behaviour.
  • Unlock the supply of finance for businesses looking to grow.
  • Make large businesses report on their payment practices and "stamp out" late payment of invoices to small businesses.
  • Give small businesses a fairer chance to get public sector contracts by requiring at least one SME to be shortlisted when smaller contracts go to tender.
  • Publish a trade strategy and give clear advice to get new businesses exporting.
  • Set up new Technical Excellence Colleges and create Skills England to work with local industry.
  • Cut energy bills for small businesses and make Britain a "clean energy superpower".

The Federation of Small Businesses (FSB) welcomed the proposals. Tina McKenzie, FSB policy chair, said: "We are especially pleased to see Labour state that it would pass new laws to help small businesses, including requiring the audit committees of big businesses to report on their company's payment practices. This is something we have worked closely with the Opposition on, and is a clear commitment that addresses one of the biggest problems facing small businesses.

"All eyes will now be on the publication of Labour's manifesto to see whether the party takes a pro-small business approach and gets the detail of these policies right."

Written by Rachel Miller.

What does the * mean?

If a link has a * this means it is an affiliate link. To find out more, see our FAQs.