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It seems that not even a week has gone by without one party pledging to make a cut, boost, increase or decrease in public spending and taxes whilst the others scoff. But what does it all mean?
All three major parties warn of cuts in public spending, pledge to make high street banks more responsible and promise to support SMEs, and improve the credit facilities available to them. Their methods, however, are what distinguish them.
So, to help make a little sense of what Darling, Osborne and Cable (is it me or does that sound like some interior design company?) currently promise – remember this can and probably will change – read on…
The Conservatives pledge the following; a one year public sector pay freeze in 2011, which won't affect the one million lowest paid workers. This has been met with wildly contrasting reactions; whilst some argue that pay freezes within the sector will only result in levels of efficiency stagnating or even decreasing; arguing that the sector must compete with the private in order to obtain an optimum work force, others equate the sector with Grandma’s Sunday veg; overdone, flaccid and demoded: Only by freezing pay will the desperately needed shake-up occur.
Labour is yet to make a firm announcement on where they stand on this; preferring to wait until the manifesto is published. However, in early March Darling did warn of a pay freeze, but for top dogs only; doctors, top civil servants, army generals and judges, in a three-year plan to get the public sector pay bill under control and save £3 billion.
The Liberal Democrats announced back in September that, were they to gain power, they too would implement a public sector pay freeze. As with Labour, this would not be across the board but, unlike Labour, would even subsidize pay increases for the lowest paid workers.
So that’s the public sector, what about the other end, those not at the behest of a faceless institution? All three parties have pledged to help SMEs, and claim to recognise the impact the recession had.
The Tories promise the following; “We will reduce the burden of red tape on business with a 'one in one out' rule for new regulations, mandatory sunset clauses and regulatory budgets for departments.”
Eh? Apparently the nightmarish administrative requirements companies are often faced with when negotiating contracts with the government will be relaxed; as a result the Tories will strive to give 1 in 4 of all government contracts to SMEs.
Other measures include: automatic small business rate relief and a “more diverse source of affordable credit, building on our proposals for a big, bold and simple National Loan Guarantee Scheme.”
Like the Tories, Labour also pledges to increase SME-government contracts but their target is 15% rather than 25%. Other measure include:
“A tax reduction for over half a million small businesses in England, 345,000 of which will pay no business rates at all.”
However, Brown’s promise to raise National Insurance by 1% has overshadowed much of Labour policy and left many furious; arguing that it will lead to businesses being reluctant to hire and slow down the recovery process.
The Lib Dems echo the Tories and aim to “cut regulation and create a fair playing field for business by properly assessing the cost and effectiveness of regulations before and after they are introduced.” They also promise to operate a ‘one in one out’ system, meaning that for every rule introduced, another one is scrapped.
So that’s the current state of play, but what with the way policy balls have been swung back and forth of late, you’d be forgiven for thinking it was one in one out around there as well...
Source: Bridging and Commercial