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A new dawn

After all of the soundbites, shaking hands, promises and of course, the first ever televised debate the public voted that none of the major parties deserved an overall majority.

We then had the hard bargaining and slight hysteria when the parties didn't agree in a day - despite the fact that the average time it takes to form a European coalition government is 40 days.

Now that a new government has been formed, what does this mean for small businesses?

The first point is that the forming of a government in itself should help business owners by calming the markets. Stock markets rose following the news of the new coalition and industry leaders have publicly welcomed the ending of the uncertainty.

For the new government to work compromise will be required by both sides, but there are certain key issues that the Conservatives won't budge on.

For instance, the rising of National Insurance has been scrapped. The ‘tax on jobs' had been scheduled to take place in 2011 - when many analysts anticipate small businesses will be seeking to recruit in earnest in order to meet renewed demand.

"Small businesses did not want this tax on jobs because clearly it would have been a major barrier to staff retention and job creation and would have hindered economic recovery," said Phil Orford of the Federation of Private Businesses.

However, the government have also stated their intention to raise Capital Gains Tax rates to bring them in line with income tax and there is confusion regarding the future of business link.

The new government must be given time to establish its ideas, key policies and learn to work together before it is judged by business owners. The economic recovery is fragile and the government and businesses must do all they can to work together to secure the economy continues to grow.

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Post Date: May 14th, 2010