New SMEs to get £100 weekly allowance, says Lib Dem leader » SMEInsider

New SMEs to get £100 weekly allowance, says Lib Dem leader

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Tim Farron, new leader of the Liberal Democrats, used the second day of its annual party conference to promote its business policies, as he outlined plans for a new ‘startup allowance’ of £2,600, or £100 a week, for all new small firms.

 

Rebuilding the party

The Liberal Democrats lost over 50 seats during May’s General Election, forcing leader Nick Clegg to stand down.

Tim Farron is now running the party, which only has eight MPs, as he looks to promote a pro-business policy that hopes to win over disillusioned Labour party supporters.

‘‘Liberal Democrats believe that if you have a dream you should be supported to fulfil it. Those who take the chance to set out on their own and create a business should be celebrated and supported,’’ stated Farron at the Liberal Democrat conference in Bournemouth this weekend.

‘‘Lib Dems recognise the courage of those who seek to create something new.’’

‘‘While Labour have said they now want to strip Government support for businesses and the Tories focus on giving tax cuts to giant corporations, we want to focus on entrepreneurs and small business seeking to grow.’’

The startup allowance would cost £26m a year and would be funded by a reversal of the most recent reduction to corporation tax, which was announced by George Osborne in the Tories summer budget.

 

‘Unashamed land grab’ for Labour voters

‘‘The Start Up Allowance would be open to anyone starting a new business with a loan from the start-up loans facility, which provides loans and mentoring to help new business owners develop their business plan,’’ continued Farron.

The party leader continued his speech by reflecting on the Lib Dem’s time in government from 2011-2015, where former business secretary Sir Vince Cable worked towards funding startups via the British Business Bank, which had £1 billion at its disposal.

‘‘We also created the New Enterprise Allowance – which meant those in receipt of JSA, or another out of work benefit who became self-employed, got an allowance worth up to £1,274 to help pay living costs – effectively continuing the benefit payments for the first few months while the business grew. This new policy builds on these offerings.’’

A party insider stated that this move by Farron is an ‘‘unashamed land grab’’ for Labour voters who care about small business and entrepreneurship who feel that the party will achieve nothing under the new leadership of left-wing politician Jeremy Corbyn.

  • I love the sentiment of this, but why only give it to people who use a start up loan facility? All it is then doing is reducing the cost of that loan.
    Support for six months is a great thing and so, in my opinion, be given to all startups (subject to certain conditions such as registering as a Ltd or LLP, for example) to help them along. If they are able to start the business without a loan, this will help them to move forward faster.

    • That’s a great point Nigel, thanks for sharing your opinion.

  • Forgive me for being thick but £2,600 OR £100 per week? OR £100 per week for 26 weeks only? Is this per year? What constitutes a new firm?
    I agree with Nigel – but I’m struggling to love the sentiment completely as I am confused about what is on offer!

    • Hi Steve, you raise a good question. According to the sources that I used, it seems that the Lib Dems will offer new firms £100 a week for the first six months after their launch, which only adds up to £2,400, which is still slightly confusing from the Lib Dems.

      The Lib Dems constitute a new firm as a company that has been running for less that two years.

      I also think the sentiment is great, but Farron needs to do more in clarifying this initiative. Are you an SME owner? Would you get on board this programme?

      • Fraser – Yes I am an SME owner and I guess the point is that I don’t know what the initiative is in total. However, assuming a lot of stuff to answer your question – I would be interested. Who wouldn’t if it’s ‘free money’?
        My concern is that if they play around with the Corporation tax then we are back to giving with one hand and taking away with the other so the nett effect for a company that makes modest profits in it’s first two years maybe close to zero!
        If they lifted the corp tax back up to level it was before the last parliament – 28% – as they have stated (sort of) then a modest profit of £32,500 wipes the start-up ‘gift’ out completely! And it does that year on year!
        Better to step Corporation tax allowing SMEs start-ups maybe a 10% Tax rate for the first couple of years and cut out the red tape of claims etc. to help nurture growth and help fund repayments of start-up and growth accelerator loans.

        • You’ve made a good point there Steve regarding Corporation Tax, it sounds like the Lib Dems haven’t quite formulated a proper strategy that could benefit SMEs when it comes to funding.

          Do you think the current government is doing enough to help SMEs and startups secure funding?

          • Well – probably not but as I am about to speak to a company about partnering with them to promote Start-Up loans for SMEs I have to declare an interest there!
            Until I bumped into them during a meeting we both presented at I had no idea about the funding available – for both Start-Up loans and Growth Accelerator funding – hence my conclusion that they don’t do enough.
            I ask myself this question – how many emails have I had promoting all kinds of different business services (SEO, web design, Lead Generation, etc etc) and how many promoting funding for new and growing SMEs? We all know the answer to that. Funny thing is the Government have full access to Company details – it wouldn’t be difficult to identify new companies and drop them a line! But, that’s our opportunity to a degree although some help wouldn’t go amiss.

    • PeterJ42

      Nothing is “on offer”. These people are unelectable, so of course they can promise to give you someone else’s money to get themselves into power.

  • PeterJ42

    When a member tried to get JSA, he got lost in the system, receiving nothing at all. He had to wait over 6 months and lost a major sponsor as a result. JSA simply wastes people’s time and stops companies being formed due to the wait for bureaucracy.