What will the election mean for the business community? As with the electorate generally, there are a range of issues in which business has a particularly keen interest.

As a broad brush guide to what will be on offer to business, here is a review of where the three main parties stand on a range of business-related issues.

Taxation

Labour claims that, as a result of their reduction of direct tax rates, the tax burden on the average family is at its lowest since 1972 and corporation tax is now the lowest of any major industrialised country. While the opposition parties claim that what the present government gives with one hand is often taken away with the other, Labour under chancellor Gordon Brown is not likely to be as vulnerable on tax as it has been so often in the past.

The Conservatives are committed to abolishing the climate change levy – the so-called energy tax – which comes into effect this month. They say that, although it may raise £1bn, it will lose UK jobs as British companies lose business to other countries. The Tories would also pay the working families tax credit as a benefit rather than, as now, through the payroll. They claim that paying the credit as a benefit would save £100m. A reform of IR 35 – the Inland Revenue’s plan to crack down on tax avoidance by personal service companies – has also been heavily criticised and its reform is promised. The Tories are also making a big issue of fuel tax – the issue which boosted their poll ratings briefly over the autumn.

The Lib Dems promise a new 50p tax rate for those with income of £100,000 and over, but would take the low paid out of the tax net altogether. They would phase out some reliefs and allowances and increase taxes on pollution. A ‘citizens tax contract’ would be sent to each household with their annual tax return, setting out how far performance targets were being achieved.

Pensions

The Labour government will resist strong pressure from within the Labour movement to restore the link between the state pension and average earnings. It has committed itself to a pension strategy based on three key elements: the basic state pension, linked to the RPI and topped up by the means-tested minimum income guarantee; the state second pension, which will replace SERPS; and the stakeholder pension, which came into effect in April (and which all employers with more than four employees will need to offer to their staff if they do not currently offer any form of pension scheme).

The Tories see the means-tested minimum income guarantee as a weakness for Labour. They are promising to increase the basic state pension by £9.50 for single people below 75 and £13 each for couples. They have been very critical of Labour’s decision to abolish ACT relief on dividends and could still undertake to reverse this.

The Lib Dems would introduce a new, flexible approach to the age of retirement, allowing people to retire at any time within a range of 10 years. They also promise a flat £5 increase in the basic state pension, with an extra £15 for those over 80.

Small businesses

Labour has enacted the late payment legislation and set up the Small Business Service, which is intended to play a key role, in collaboration with Regional Development Agencies, in job creation and economic regeneration. They have promised to increase funding of Business Links by 30% and to establish a regional venture capital fund.

The Conservatives propose to simplify VAT. They would allow six weeks at the end of each quarter for the filing of VAT returns, ensure that businesses could get binding written guidance from VAT offices, and would set up an independent business protection unit which could reschedule VAT payments for companies that would otherwise become insolvent. They also promise to carry out an independent audit of the total cost of all government regulations and impose savings targets on all ministers to reduce the cost for which their department is responsible.

The Lib Dems also see VAT as a problem area for small firms and would raise the VAT registration threshold, thus taking more businesses out of the VAT net. They would also require the banks to develop new codes of banking practice specifically for small firms and encourage them to develop new sources of SME finance, including grants, equity finance and mutual guarantee schemes. They would ensure that government purchasing practices gave special emphasis to and easier access for SMEs.

Employment

Since coming to power in 1997, Labour has shown a real commitment to extending employee rights: the minimum wage and the working time regulations bear testimony to this and Labour is proposing to go further in this direction. The Labour government is, though, opposing the EU plan to issue a directive on compulsory worker participation for all companies with more than 50 employees.

Although the Conservatives always objected to the minimum wage on the grounds that it would cost jobs, they are not proposing to abolish it. They would, how-ever, abolish the New Deal, which they call costly and ineffective, and replace it with a scheme which they call ‘Britain Works’.

The Lib Dems support Labour’s ‘family friendly’ employment policies, including improved provision for child care and shared parental leave. They champion the rights of employees to participate in decision-making, profit-sharing and employee share ownership.

Training

Labour has set up new Regional Development Agencies and Learning and Skills Councils to address business training needs. The Small Business Service is also addressing the training needs of the SME sector.

The Conservatives would introduce vocational options within a simplified national curriculum, thus promoting the early development of IT skills.

The Lib Dems promise to spend an extra £2.6bn a year on education and training. There would be tax credits for employers taking on the long-term unemployed in areas of very high unemployment. They would impose a 2% education and training levy on company payrolls to ensure that firms invest in training: this would be deductible against the cost of accredited training or contributions to individual learning accounts.

Europe

Labour supports Britain’s entry to the single currency in principle, but will not hold the promised referendum on this issue until it considers that the economic conditions are right – or , as sceptics say, until it’s confident it can win it.

The Conservatives promise to keep the pound throughout the next parliament and will not hold a referendum. Beyond this, they have strong reservations as to whether entry to the single currency would ever be in Britain’s political interests.

The Lib Dems will campaign for a Yes vote in any referendum on the euro, which they believe should be held at the earliest opportunity.

Rural issues and the environment

Labour has given environmental issues a strong platform and has appointed a minister for the environment and a minister for corporate social responsibility, in addition to the deputy prime minister, who is in charge of environment policy. It will continue its policy of encouraging businesses to accept the business and commercial advantages of being aware of ethical and environmental issues. It is likely to require large listed companies to produce special social responsibility reports; a new Companies Act will also give company directors wider responsibilities to accommodate stakeholder interests in their decision-making.

The Conservatives would abolish national and regional building targets and would give every town the right to establish a green belt. The Tories are specifically campaigning against the government’s plan to build 840,000 new homes in the south-east of England over the next 20 years.

The Lib Dems would pursue a long-term shift in taxation to pollution and natural resource use. The Treasury would be required to set out environmental goals, indicators and policies in a ‘green chapter’ of the Budget, including an environmental ‘balance sheet’ and an assessment of the environmental impact of each Budget. New ways of measuring sustainability and the quality of life would take their place alongside conventional GDP statistics. The Lib Dems would also establish a voluntary ‘citizen’s service’ to enable people to work for one or two years on environmental and crime prevention projects.