Group says Blair must now prove committment to small business

Tony Blair must prove early on in his historic third term that Labour is committed to supporting small businesses, the back bone of the UK economy, a leading business pressure group said today.

The Forum of Private Business said Labour's taxation and 'family friendly' policies had angered many bosses who are becoming increasingly sceptical about Labour.

"The next five years are going to be extremely tough for small businesses if Labour decides to keep increasing national insurance contributions, the minimum wage and fuel duty,' said the FPB's Chief Executive Nick Goulding. "Red tape and an extension to maternity rights are making it harder for businesses to be flexible and respond to market and consumer demand. If Labour believes in creating a business environment, as it says it does, it must reduce taxation and regulation. "

FPB Suggestions

National Insurance Contributions: The New Government must look closely at the impact of increases in National Insurance Contributions and their effect on the cost of employment.

VAT: the new government must consider implementing a reduced rate for labour intensive services.

Capital Gains Tax: Needs to be reviewed downwards. Business owners often depend on the transferring of their business for their pension, the current rules lead to a depleted retirement fund for owners of small business.

Fuel Duty: The new Government must abandon rises in fuel duty if small business are to remain competitive.

Business Rates: The current level of business rate impacts disproportionately on small businesses. Small Business Rates Relief thresholds should be raised so more businesses can qualified.

Integrate National Insurance and PAYE: Administering two parallel sets of regulation increases the red tape burden; integrating the two would lead to significant savings in time and money for small businesses.

Liability Insurance: Employers' Liability Compulsory Insurance has increased by as much as 400 per cent in some sectors. Given such increases, the imposition of Insurance Premium Tax should be either abolished or significantly reduced.

The Right to Self Employment: Making self-certification of employment status easier would alleviate many of the concerns surrounding IR35 and 19 per cent non-corporate contributions. This would create certainty in the minds of the tax payer and the exchequer regarding contributions.