Should the UK’s small businesses be terrified of a Labour government? Maybe not so much: if they look through the increasing hysteria around Jeremy Corbyn’s supposedly hard left agenda, entrepreneurs may be surprised by what they find.
It’s certainly true that the tone of Labour towards business under Mr Corbyn is more aggressive, particularly on populist issues such as directors’ remuneration, privatised public services and trades union rights. But that’s largely rhetoric; Labour’s policy platform, as much as we know about it, does not remotely resemble some sort of attack on the foundations of capitalism.
Small businesses, in particular, have little to fear. Labour’s plans for a sharp increase in corporation tax – from 19 per cent to 26 per cent – probably wouldn’t apply to most small firms, since its intention has been to exempt businesses making less than £300,000 of profit from the increase. Similarly, plans to force businesses to hand over a proportion of their shares to employees are aimed at the biggest, publicly-listed corporations. Eye-catching plans for the renationalisation of public utilities aren’t an issue for small and medium-sized enterprises either.
So if it is not threatening small businesses, what does Labour have to offer entrepreneurs? Well, it’s worth pointing out that Labour’s instinctive desire to stand with those it perceives to be the victims of big business may play in favour of smaller firms. There are early signs of how that might translate into action: Labour has suggested fines for companies that pay their suppliers late, for example, and promised to rethink public procurement to increase the numbers of small businesses winning local and national government contracts.
Labour also has ambitious plans for a National Investment Bank to co-ordinate the activities of banks and other financiers in providing funding for national infrastructure projects. It believes this institution could play a key role in improving small businesses’ access to funding.
In addition, Labour believes the US Small Business Administration could be a useful model for an organisation here to provide a one-stop-shop for small business advice and support. It worries that the ecosystem of small business support that has grown up in recent times, particularly since the abolition of Regional Development Agencies six years ago, lacks coherency and transparency. Too often, it argues, businesses don’t know where to go to find the specific support they need.
Elsewhere, Labour has rightly identified the issue of business rates as an urgent priority for review. It promised reforms to the system at last week’s party conference, though specific ideas are short on the ground. Small businesses with physical premises will nonetheless welcome the intent. One previous Labour suggestion, of annual reviews of business rates, rather than huge increases every few years, might help at the margins.
All of this, naturally, must be set in the context of the broader economic backdrop, where some entrepreneurs are wary of Labour. Supportive policies will be no use without economic growth.
Equally, Labour is insistent that it wants to tackle income inequality. Plans to raise the minimum wage and to increase higher rates of income tax for top earners may unnerve some small businesses.
Nevertheless, entrepreneurs who worry that a Jeremy Corbyn-led government would spell disaster for private enterprise may be in for a pleasant surprise. For small businesses at least, the prospect looks far less frightening than they imagine.
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