All the political parties' approach to small business

With fewer than 100 days to the general election, Growth Business caught up with the small business spokespeople for the main political parties

With fewer than 100 days to the general election, Growth Business caught up with the small business spokespeople for the main political parties

There are now fewer than 100 days to go until what is widely anticipated to be one of the closest general elections in modern history. With Labour accused by some of picking a fight with big business and the Conservatives’ links to hedge funds under scrutiny, it’s clear that the corporate agenda will play a decisive part in the outcome.

But what of the smaller business community? Parties from all sides of the house have been falling over themselves to praise entrepreneurs both at the start of their business careers and those who have gone on to run established SMEs. These companies have been called both the “lifeblood” and the “engine room” of the UK economy. And with SMEs accounting for 99.3% of British business and accounting for 48% of private sector employment (according to the Federation of Small Business), those statements seem far from hollow praise.

So beyond flattering their egos, what are the main parties planning to offer the small business community if elected? Growth Business got in touch with the spokesmen for small business from the main political players in Westminster to find out. Unfortunately, the Liberal Democrats could not put forward anyone for comment – but to be honest they probably have a lot their plate at the moment so we’ll let them off.

Conservatives – Minister for business Matthew Hancock

Unemployment is down, GDP is rising and wages are finally going the right way under the coalition. But despite being very much the senior partner, has the Conservatives’ vision for business been overshadowed by the fact the man at the top, secretary for state for business, innovation and skills Vince Cable, is a Liberal Democrat? Conservative business minister Matthew Hancock, predictably, doesn’t think so.

“I’ve never had a difficulty in drawing a distinction with my attitudes with Vince,” he explains. “We work closely together but I think everyone knows where we stand.”

The Conservatives’ vision is based on “a successful record, ambitious vision and the values to underpin it,” according to Hancock. It’s a nice line, if a little over-rehearsed, and one I suspect we’ll be hearing more of in the run-up to the election. But to be fair to Hancock he does have stats to call upon to back up his second-hand sound bite.

There are 760,000 more small businesses in the UK now compared to 2010. But how much of that is due to Conservative policy and how much down to the vision of Vince Cable still remains unclear.

Liberal Democrats – Secretary for business, innovation and skills Vince Cable

As mentioned above, the Liberal Democrats claimed not to have time to speak to us directly. But they did send across a pre-prepared statement from Vince Cable, which we will outline below.

Despite taking some serious flak over the past five years, the Liberal Democrats can make a strong claim to have made the workplace fairer for employees in this parliament. Veracious support for the Living Wage and an increase in the tax-free threshold have, despite what the Conservatives may tell you, come largely from the yellow side of the partnership. But have they made conditions better for the small business owners themselves? The Federation of Small Business has expressed concern about some small firms’ ability to pay staff Living Wage. But Cable sees his party as on the side of owners as well as workers.

“In government, we’ve cut corporation tax from 28% to 21% and reduced it to 20% for small businesses with profits up to £300,000. From April 2014, we’ve been saving all businesses and charities £2,000 from their National Insurance bills each year and Liberal Democrat campaigning led to a tenfold increase in capital allowances,” the statement read.

As with the rhetoric from Hancock, this is all undeniably true of the coalition. But of the Liberal Democrats themselves? This is a little harder to establish beyond doubt. So in the future, if they are not in a coalition with the Conservatives but with another party or even on their own (hey, it could happen), how would they proceed?

“We will continue to reform business tax to ensure it stays competitive, making small and medium-sized enterprises the priority for any business tax cuts. In particular, in England we will review business rates, which are a disproportionate burden on smaller businesses,” Cable continues.

The Liberal Democrats are in a strange position in the run-up to the election – trying to highlight their successes in government while furiously trying to distance themselves from the partnership that allowed them to meet those goals. But in Cable they have someone who appears to have gained the trust of a large proportion of the small business community. He, perhaps more than anyone else in this process, understands what it takes to make small business thrive.

Labour – Shadow minister for small business Toby Perkins

Labour has certainly had its run-ins with large business recently. But upsetting the large corporates and their owners is nothing compared to the disaster that falling out with the small business community would be.

Toby Perkins is the man tasked with keeping SMEs onboard in the run-up to the election. As with many of the spokesmen for small business, he is keen to distance himself from his current status as politician and to focus on his previous role as a business owner. “I see myself more as a businessman than a politician,” he has previously stated.

Perkins has the backing of Labour leader Ed Miliband. Back in 2010 he pledged to make Labour “the party of small business and enterprise”. The hastily-convened Labour Small Business Taskforce then got on with the business of creating a dossier of policies Labour should be proposing in the next election. When the final report came in 2013 it was not, to be perfectly honest, mind-blowing stuff. Ideas like improving broadband connections for small business are hardly going to win elections, and Lord Young’s recent report on small business suggests it’s a problem that has largely been fixed.

One of the problems that Labour have is that, certainly on the face of it, things have gone pretty well for small businesses under the coalition. But Perkins is targeting access to funding as an area that Labour can look to improve.

He cites “stimulating the peer to peer and alternative finance markets” as areas in which Labour can improve on the current situation. He hopes that while addressing cash-flow problems from both sides in a sort of pincer movement – tackling late payment culture and increasing funding going in, he can create a culture in which “small businesses can be confident they have the sufficient funding”.

The other pillars of Labour’s small business policy are to reduce business rates, reduce energy prices and improve access to high-quality advice for start-ups. As Perkins himself explains, many people who have taken up self-employment “don’t know where to turn” when looking for advice. By beefing up the options available for new business owners he hopes to prevent people being “left in the wilderness” of small business ownership.

It’s clear that Labour are more than keen to be friends with the small business community. But while their policies do appear to offer benefits for entrepreneurs, their solid commitments can seem a little lightweight at times.

The Green Party – Spokesperson for business, innovation & skills Cllr Howard Allen

The Green Party aren’t really known for their groundbreaking business manifesto – but it’s something they have to spend some time thinking about if they’re to be taken seriously in the long-term.

Howard Allen told us one of the best ways to support small firms is to “level the playing field so that smaller businesses can compete with the larger corporates who just take resources out of the local community”.

Keeping business local seems to be a running theme in the Greens’ small business manifesto, which Allen admits is still “very much at a draft phase”.

“We’re in support of putting more money into the local communities so support the business,” Allen explains. “One way we’re doing this is creating a £2b community bank for local businesses.”

So far the Greens’ policies don’t seem radically different to the traditional parties. However talk turns, understandably, to the environment. The party wants to give small business owners the tools to work more from home – thus avoiding carbon-heavy office blocks being built all over town.

Allen also hopes businesses will take their own responsibility as environmental citizens seriously.

“We’re hoping that smaller businesses would have sustainability incorporated in their long-term plans,’ he says.

The Greens, one suspects, will not win or lose one single vote as a result of their small business policies. But to be fair to them their approach seems to be more than a token gesture. Encouraging home working, making businesses more sustainable and offering support for local communities are all sensible policies. But how closely these pledges will ever be scrutinised is yet to be seen.

UKIP – Margot Parker MEP

UKIP are another party of whom the words “champions of small business” don’t naturally spring to mind. But in reality the majority of their polices are pretty mainstream.

Cutting business rates, improving access to premises and improving access to funding are three areas Parker told us UKIP would be focusing on. But inevitably talk turned to the EU and workers from overseas (ok full disclosure – it was us who brought it up).

Reducing red tape, another UKIP mantra, is the main reason business should be rejecting the EU, Parker argues. But does she think the EU is the main reason small business has to deal with this problem?

“I don’t think it comes from the EU, I know it does. And the UK government welcomed it and put brass knobs on it,” is her emphatic reply.

And what of workers coming in from other EU countries? UKIP do not believe they should be free to come and work in this country without restrictions, as they currently are. Recent reports by CIPD and CBI suggested this would cause problems for small businesses; but Parker disagrees and calls for a system much more akin to the one we currently have for non-EU workers.

“UKIP want to see a points-based system from the EU in the same way that Australia and Canada does,” she confirms.

But wouldn’t this in fact create more red tape for small businesses? Rather unconvincingly, the UKIP MEP refuses to accept this.

“It won’t create more red tape. If people want to stay for two of three years I don’t see there being any problems. It’s nothing that smaller business owners shouldn’t be able to handle,” she suggests.

As a party on the right wing of British politics many would see UKIP as a natural friend to enterprise. And cutting red tape and regulation is certainly something small business owners would welcome. But the potentially damaging effects of restricting EU migration will be a concern for firms already faced with a burgeoning skills crisis.



Hywel Roberts

Hywel was editor of Growth Business in 2015 and then moved on to be deputy editor at Works Management.

Related Topics

Early Stage Funding