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This Is Not The Conservative Government Business Thought It Was Getting

12/08/2015 12:29 BST | Updated 11/08/2016 10:59 BST

The 2015 Conservative Party manifesto promised to 'back British business' and make Britain 'the best place to do business in Europe' but since being elected in May this has not been the type of Conservative Government that business thought it would be getting.

Businesses of all shapes and sizes welcomed the manifesto commitments to cutting red tape, tax and regulations. But so far, the Government has been interventionist and unafraid to use the power of the state. We appear to be facing a new age of government intervention.

It is clear that George Osborne is in charge of operations and from economic policy through to European negotiations. The Budget was a typical Osborne extravaganza.

It was though more political than economic in nature being designed to unsettle the Labour Party and make real the Prime Minister's post-election victory claim of being a One Nation government.

This meant though doing things that were unexpected and unwelcome as far as many businesses, especially small businesses, were concerned.

Chief amongst these was the promised introduction of the Living Wage and the associated cost implications for businesses. Whilst large corporations were left to coo over a further reduction in corporation tax, small businesses were left further deflated by the dividend changes. It may be that the real backlash against these changes will not happen until next April when everyone will notice the change.

The 'apprenticeship tax' for larger businesses too did not find universal acceptance either with many complaining about the potential costs.

Osborne would criticise Gordon Brown's budgets for tinkering with the tax system but accountants were left pouring over the small print of this Budget trying to work out all the ramifications. Osborne too is a 'tinkerman'.

As a way of being seen to be taking action against the attitude and approach of some businesses towards tax the Government published 'Improving Large Business Tax Compliance'. This included measures such as a legislative requirement for all large businesses to publish their tax strategy, a new voluntary 'Code of Practice on Taxation for Large Business', which sets out the behaviours which HMRC expects and a 'Special Measures' regime to tackle the small number of large businesses that persistently undertake aggressive tax planning.

As well as the action the critical emphasis is placed on enabling greater public scrutiny of business' approach to tax planning and compliance.

There is, without doubt, an element of Ministers wanting to act in a more muscular way relative to the straightjacket of the Coalition period. All that pent-up demand for change is now looking for a way out and a full Cabinet of Conservative Ministers, the first for 18 years, are also egging each other on.

There have also been promised moves against the foreign ownership of land and property and changes to non-dom status. As well as tax reports, companies will need to deliver anti-slavery supply chain reports.

Landlords meanwhile claim that they will have to increase rents to cover the tax breaks removed in the Budget. Now, so that Government can deal robustly with the Calais crisis, landlords will be expected to evict illegal immigrants. In other words, businesses are being expecting to act as 'policemen'.

Sectors such as health and education, which are largely state-run, are well used to Government intervention as too is local government. Whilst businesses may be welcoming calls for devolution to cities, the smack of central government currently remains. From suggesting that authorities look at their boundaries through to 'approving' plans before any progress is made.

Moves on buses polices, shifting to re-regulation, may happen across the country and for a Conservative Government to follow this path has shocked transport companies. Re-regulation may deliver benefits but is not what the transport sector were expecting from the Conservatives.

There have been loud and consistent cries from small businesses and start-ups, particularly in the tech sector, about the adverse impact that the Government imposition of visa quotas is having. The political imperative behind taking action on immigration is, many claim, blocking access to skilled foreign workers which is holding back growth.

This is not a discussion about the validity of any of these moves and it is not as simple as saying that any of them are pro- or anti- business. It instead demonstrates that Governments cannot be easily categorised and the measures they introduce simply estimated on the basis of political colour. History too may not be an uncomplicated guide. If a week is a long time in politics, then 18 years since the last Conservative majority government is an eon.

Whether it is a case of politics trumping economics or not, businesses can expect more confusing turns and unexpected moves by this Government.