Are Tories taking the high ground in battle for business votes?

At long last, I've had a reply from the Conservatives - a comprehensive and persuasive reply at that. The question is, do we believe there are £6bn of efficiency savings to be had? Labour are rapidly losing touch with the business community over the issue of National Insurance and it could prove to be their downfall. A U-Turn could be the only option.

The full text of the reply is shown below:

Dear Mr. Edwards

I am writing on behalf of David Cameron to thank you for your e-mail of 14th March 2010. I apologise for taking so long to reply; our office has been inundated with correspondence in recent months. Nevertheless, we are grateful to you for getting in touch, and I have taken careful note of the points you raise.

Government needs to create a climate in which small businesses can thrive and compete, both nationally and internationally. In 1997, Britain’s tax system was one of the most competitive in the developed world. But over the last decade we have become progressively less competitive and our tax system has become the most complex in the world. And astonishingly, the Budget confirmed that Gordon Brown wants an extra £1 billion in taxes out of small and medium-sized businesses.

We can’t go on like this. And that is why, if elected, a Conservative Government will make sure that Britain is open for business again.

We believe in low taxes, so we will ensure that the largest part of the burden of dealing with our budget deficit – a critical step if we are to get this country back on its feet – falls on lower spending rather than higher taxes. And, where savings can be realised from existing budgets, we will use some of these to protect jobs and businesses.

This is why we have announced plans to cut waste in order to avoid most of Labour’s planned tax increase on working people. The 2010 Budget confirmed Government plans to raise Employer National Insurance Contributions (NIC) for everyone earning over £5,700 per annum. This is a tax on jobs that will undermine the recovery. We will stop a large part of this tax increase by raising the secondary threshold at which employers start paying NICs by £21 a week, saving employers up to £150 for every person they employ relative to Labour’s plans.

We will also stop the increase in NICs for most employees. Relative to Labour’s plans everyone liable for Employee NICs earning between £7,100 and £45,400 – seven out of ten working people – will be up to £150 better off each year under the Conservatives. Lower earners will get the greatest benefit as a percentage of their earnings. Nobody will be worse off than they would be under Labour’s plans.

These proposals have been backed by a raft of high profile business leaders – Sir Stuart Rose, Executive Chairman of Marks & Spencer, Sir Stelios Haji-Ioannou, Founder and Chairman of easyGroup, Simon Wolfson, Chief Executive of Next and Justin King, Chief Executive of Sainsbury’s, to name but a few – as well as Britain’s top business organisations such as the Confederation of British Industry, British Chambers of Commerce and Federation of Small Businesses.

We also aspire to create the most competitive corporate tax environment in the G20. So to begin with, we will cut the headline rate of corporation tax to at least 25 per cent and the small companies’ rate to 20 per cent, funded by reducing complex reliefs and allowances introduced by Gordon Brown.

And we have also outlined plans to reform government support for business, much of which is, at present, delivered through Business Link. We are considering a range of options but do not currently have any plans to abolish Business Link itself.

These proposals are in addition to our plan to allow local authorities to offer business rate discounts to help struggling firms, and to make small business rate relief payable automatically to qualifying firms.

Meanwhile, we have tried to offer practical ideas for further action. A Conservative Government will:

· reduce the burden of red tape on business with a ‘one in one out’ rule for new regulations, mandatory sunset clauses for regulators and regulatory budgets for departments;

· help small firms grow by using Government guarantees to create diverse sources of affordable credit and providing a £2,000 bonus to small and medium-sized businesses for every apprenticeship place they create;

· cut the number of forms needed to register a new business – moving towards a ‘one-click’ registration model with the aim of making Britain the fastest place in the world to start a business;

· end restrictions on people starting a business in social housing, to enable social tenants to become entrepreneurs;

· make enterprise a central pillar of our plans to get Britain working again; and

· open up government procurement to small and medium-sized businesses by reducing administrative requirements.

We know that only the private sector can generate the sustainable growth we need to get Britain out of the red. That is why we have set out these plans, and why we are proud to be the party of enterprise and hard work.

We all know that the re-election of a Labour government with more debt, waste and taxes will bring us a new recession. That is why there is a clear choice at this election between five more years of Gordon Brown’s tired government making things worse, or David Cameron and the Conservatives with the energy, leadership and values to get the country moving. I hope you will feel able to join us as we seek to change our country for the better.

Kurtis Christoforides
Office of David Cameron MP

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