Conservative Party Conference Birmingham: The Crunch report

Posted on Oct 5th, 2016 | Expertise

There is a spring in the step of delegates at this week’s Conservative Party Conference in central Birmingham. Despite their government backing the losing Remain vote (patchily, it has to be said) and David Cameron resigning as Leave won, this has all been re-cast by the party in a totally new light.

The conference is constantly reminded that, for the first time in 18 years, the Conservatives won outright a UK General election in May 2015. No more pesky Liberal Democrats as coalition partners; UKIP are lost in the wilderness having achieved their raison d’etre. Meanwhile, the Labour Party continues to be riven by splits rendering them an unconvincing and ineffectual opposition in the eyes of most observers.

Instead most speeches, even from MPs known to have been ardent Remainers, now celebrated the liberation that the Leave vote was delivering. They cheered the freedom for a great new country to be built, led by their new Prime Minister Theresa May. It’s still May’s honeymoon period as a new leader, and by Jove were they going to enjoy it.

With polls where they stand and the state of the opposition parties, it’s hard to argue with the confidence most Tories are exuding. That they are the likely party in government for the foreseeable future was also confirmed by the vast numbers of delegates, stands, and fringe events all jockeying to shape the party’s thinking for the years ahead.

My time at conference was aimed at gaining better insight into where the Government sees economic and tax policy going in relation to micro-businesses. I also took every opportunity to make the case to MPs for policy to pay far more regard for micro-businesses, given that they employ 8.4 million people – the second largest employment sector in the UK.

Video report from Conservative Party Conference 2016

Overarching Government policy

From attending keynote speeches and fringe events featuring ministers, MPs, and more, I can summarise the Government’s current direction of travel as:

  • Brexit will happen – official negotiations begin Spring 2017.
  • All existing EU regulation will be transposed into UK law so there will be no sudden changes once EU exit is achieved.
  • Economic turbulence is expected as part of the exit process, so policies are being studied to soften the bumps and keep spending going. These will likely include some new government infrastructure investment.
  • Boosting productivity will be a major focus through skills and infrastructure policies.
  • Great stock is being played in the recently announced Independent Review of Employment Practices in the Modern Economy, chaired by Matthew Taylor.


And for Micro-businesses?

To the frustration of many present, there was a stark lack of detail in the ministerial presentations both in and out of the main hall. Speculation is rife that either ideas are being held back as future Brexit bargaining chips, or that simply the weight of Brexit work needed is taking all the available bandwidth. I suspect there is some truth in both.

I saw great passion and knowledge for the micro-business sector from Margot James MP, the new Minister for Small Business, Consumers, and Corporate Responsibility. James was clear that she would be batting for the sector within Cabinet discussions, especially around access to the single market.

In a self-employment fringe session with Damien Hinds MP, Minister for Employment, I heard about his solid understanding of the issues affecting the low income self-employed. The session saw the perennial issues of access to finance, social security complexities and the complexities of some legislation all raised. Warwick Lightfoot, a former government advisor and now Research Director at Policy Exchange noted rather depressingly that these were the same issues government were looking at 15 years ago.

The Prime Minister and many Ministers all echoed a desire to clamp down on unethical capitalism and tax avoidance to ensure greater fairness across the business landscape. How this will be achieved was left unsaid, but any policy that puts micro-businesses on a level playing field would be very welcome.

One of the few points of total clarity was the continued strong commitment from Ministers to deliver the Making Tax Digital programme on time and in full by 2020. We at Crunch think this is a positive change which will deliver improvements for our customers. But it was rather surprising to hear one think tank researcher cite the programme as a success story before public use has even begun!


What for the future?

Official pronouncements were disappointingly devoid of detail. But what was interesting to note was how many sessions were using Brexit as an opportunity to re-evaluate long standing assumptions as to how things are done.

For example, a number of sessions on tax heard serious proposals floated for abolishing Corporation Tax altogether, replacing VAT with a sales tax, replacing inheritance tax with a wealth tax, ditching business rates for a land value tax, and merging National Insurance with Income Tax.

Most of these will probably never see the light of day in a government policy paper, but still it’s great to hear new and different ideas being batted about so openly. This might well be a fortuitous moment to build the case for such changes. For while the business of Brexit is dominating the agenda, what comes next cannot be ignored.

Obviously, the terms of Brexit will determine the fiscal and legal latitude the government has, but an opportunity for more radical change to benefit micro-businesses may be closer than many realise. Our work in partnership with the RSA on reviewing policy for the micro-business sector feels more timely than ever. We look forward to sharing with you the next steps as the work progresses.


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Written by Jason Kitcat

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