Labour’s Small Business Manifesto Assessed
Labour launched a small business manifesto today with 20 pledges to boost enterprise. How does Labour’s offer compare to the Conservatives?
Here are my five big takeaways:
1 Infrastructure - Labour have a bigger offer on improving the things that will stimulate small business start-ups
Commentary has underplayed the extent that fibre broadband roll-out will have on expanding small and medium enterprises (SMEs). London-centric types may wish for speedier internet but in many towns and villages across Britain that have suffered decades of chronic under-investment and de-industrialisation they are crying out for a fast internet connection that will both attract new businesses to their areas and equip local people to start up their own. Labour’s plan to connect northern cities together is a major departure from current government strategy to throw billions at the London to Birmingham high speed line, and only then move northwards from there.
2 Access to finance – A workable plan backed up by cash for SMEs and institutions to guide strategy
The Tories plan to “launch a review” into improving access to finance and credit, but Labour have unveiled plans showing exactly how that can be delivered. The creation of a Post Bank – first revealed here on CLASS back in April - would support SMEs with finance. This, and a generous £250 billion National Investment Bank and network of Regional and National Development Banks, would rebuild and reinvigorate communities.
3 – Stamping out late payments – Getting tough with concrete measures
Cashflow is the lifeblood of small businesses, so late payments by bigger companies can cause enormous difficulties. For single traders and couples who rely on the income, late payments can mean not eating. Labour plan to introduce an Australian-style system of binding arbitration and fines for persistent late-payers. The Tories plan to “clamp down on late payment more broadly and strengthen the powers of the Small Business Commissioner to support small businesses.” While this is welcome, Labour’s plans involve more concrete plans that will hit late payers in the pocket.
4 – Reforming business rates – Correcting an unfair system
Labour is right to say business rates are an uneven playing field. The current rates system is contributing towards the death of our High Streets – the heart of our communities. The Tories talk about “further reducing” business rates for retail but Labour’s pledge to “fundamentally reform” suggests more radical action over a tax that is failing SMEs by penalising investment and local authorities who are losing out with the government’s full retention system.
5 Green investment – reorientation of the economy
Labour reiterated its’ main manifesto pledges to invest £250 billion in a Green Transformation Fund, much of which will be dedicated to enabling and incentivising environmentally-friendly business start-ups. This is a key plank in Labour’s vision for creating one million green jobs, some of which will become suppliers to a larger-scale (green) manufacturing revival. The Tories are not offering anything remotely comparable. Their ‘Blue Planet’ fund is dedicated to eradicating plastic from the ocean, an important issue but unlikely to help many SMEs.