Lib Dem manifesto backs small business

The Liberal Democrats pledged to abolish the Department of Trade and Industry (DTI) as they launched their manifesto for business with special emphasis on small businesses.

Charles Kennedy, the Lib Dem leader, said: "Heavy-handed, interfering government can make it difficult for business, especially small business, to create the wealth that is so important for the health of our economy."

Abolish DTI

The Lib Dems say they could save £8.2 billion over the next parliament by abolishing the DTI, and removing functions deemed useful to other departments. Of the savings planned, £2.4 billion would come from the science budget, £3.6bn from scrapping business aid schemes and £1.5 billion in administration savings.

The Lib Dem manifesto said: "In a liberal market economy there is no need for an interventionist government department interfering in commercial matters and propping up failing industries against market and consumer demand."

The Lib Dems said the DTI's dual roles of promoting industry and regulating in the interests of the consumer were incompatible and contradictory. They would instead establish a Minister for Business and a small Department for Consumer Affairs.

Small business

To boost small businesses, the Lib Dems would introduce a business rates allowance to create "a level playing field" for small businesses, who often pay a higher proportion of their turnover in rates than larger companies. It would be worth an average of £628.50 a year to firms with a rateable value of up to £25,000.

The manifesto also promises independent impact assessments on new regulations, sunset clauses in all new business legislation and consultation on how to simplify business taxes.