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Becoming the Party of Small Business

Toby Perkins reflects on the work of Labour’s Small Business Taskforce and Labour’s commitment to regional banking.  You can read the full Small Business Taskforce report here.  An edited version of this article also appeared in this month’s edition of Progress magazine.

“In his first conference speech as leader, Ed Miliband expressed his determination to make Labour the Party of small business, and this month we have made another huge step towards this goal.

As the challengers of tired orthodoxies and the drivers of social mobility, small businesses share our values.  They will also be a vital part of the new One Nation economy we need to build.  Ninety per cent of people moving from unemployment into private sector employment do so with small businesses. Within the ranks of the almost five million small firms lie the seven per cent of high growth businesses that create more than half of all new jobs.

Growth and small business success go hand in hand and we cannot deliver excellent public services without the contribution they make to the economy and the Exchequer.

This is why a key plank of our policy review was the instigation of the Small Business Taskforce which had a single goal: how can the next Labour government make Britain the best place it possibly can be to set up and grow a small business?

The Taskforce was initially chaired by Nigel Doughty a man who embodied the values of responsible capitalism and was a great advocate for Labour in business.  Following his tragic death last February the Taskforce has been led by Bill Thomas the former Senior Vice President of Hewlett Packard and the driving force behind the International Centre for Programme Management at Cranfield University.

We held a groundbreaking event in Brixton Market this week to mark the report’s completion, attended by hundreds of entrepreneurs and business owners reflecting the changing face of British business, and away from the Westminster bubble.

Bill affectionately describes the membership of his Taskforce – which includes leading businessmen, entrepreneurs and academics – as a group of “unreasonable people”.  They are “unreasonable” because they are not prepared to see the world as it is and get along.  They want to build a better world for everyone.

Their work has involved widespread consultation across the UK with individual business people, business organisations such as the FSB and British Chambers of Commerce, trade unions and trade bodies.  New academic research was produced and international best practice was studied during visits to Singapore, Germany and the United States.

The 100 recommendations in the final report cover the full spectrum of small business policy – from access to finance and insolvency to skills and the machinery of government – and they are as radical as they are diverse.

This is best demonstrated by their ideas around  access to finance, which small businesses tell me is the most pressing issue facing them today.  Business lending has fallen in every quarter of the last two years and this is at least partly a result of our uncompetitive banking sector where 89% of all our businesses are locked into the five big banks.

Rather than tinkering around the edges of this problem, or simply looking to introduce one more bank to the mix, the Taskforce has examined how we can transform the existing culture of British banking.  Our European competitors, particularly Germany, have maintained higher levels of small business lending in recent years with commercial banks which are focused on supporting the real economy not maximising their own profits.

The Taskforce report analyses how local lending principles of the German Sparkassen savings banks could be brought to life in a British context.  They do not recommend an exact replica but this idea has the potential to fundamentally transform the banking sector to the benefit of small businesses and Ed Miliband has committed to creating a network of regional banks under the next Labour government.

The Taskforce also recommends radical reforms to the machinery of government.  They propose the creation of a small business agency at the heart of government.

The report reveals a failure of ambition on procurement.  Whilst US Federal laws ensure that a proportion of their procurement spend goes to American small businesses, we have no similar legal requirements and the Taskforce recommends how we can catch up.

Self employment is a challenging but empowering path out of unemployment and the Taskforce call on government to provide support for those who have the potential to move into self employment and a wider push to boost entrepreneurial skills in school and beyond.

The report also focuses on innovation and calls for a unified strategy to boost British research and development. It calls for faster access to broadband for Britain’s start ups, help for smaller firms to export and a new approach to regulation which takes into account quality, as well as quantity.

These ideas and many more demonstrate how the next Labour government can be the wind at the backs of British small business and they will form a valuable part of our ongoing policy review.”

Toby Perkins MP
Shadow Small Business Minister – Member of Parliament for Chesterfield

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Welcome

I am Toby Perkins, Labour's Member of Parliament for Chesterfield. If you would like to get in touch with me, my office is open and can be reached by phone on 01246 386 286. I also hold regular surgeries so that constituents can meet me and I can take up their concerns. If you would like to make an appointment then please do contact my office. Thank you for visiting.

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