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BLOG: A Better Plan for Britain’s Prosperity

On Monday Ed Miliband launched Labour’s new industrial strategy, called A Better Plan for Britain’s Prosperity.  This document makes it clear that voters in May will have a clear choice between competing visions about how our economy can be successful in the twenty first century.

The Tories are committed to continue with their failing plan, where a few at the top become ever more successful whilst the rest of the country are excluded from any recovery.  By contrast, Labour’s modern industrial strategy is a better plan, one which recognises that for Britain to succeed we need to build inclusive prosperity that supports all sectors of our economy.

Large businesses have a key role to play in this and in opposition we have moved to integrate the thinking of successful British corporations into our policy development.   Jaguar Land Rover’s Executive Director Mike Wright led our review on strengthening manufacturing supply chains; and Sir George Cox reported for us on tackling short termism.

So whilst David Cameron and George Osborne are set to badly miss their export targets and are currently pushing Britain towards the exit door of the EU risking vital jobs and investment, a Labour government will offer firms certainty in our continued membership of the EU, our biggest overseas market, and work alongside our European partners to focus on growth.

We will also work to rebalance the economy to ensure that all businesses – large and small – are able to innovate and grow.

ed-milibandUnder Labour, small businesses will always be the first in line for tax cuts.  A Labour government elected in May would cut and then freeze businesses rates for properties with a rateable value of less than £50,000.  This will directly reduce the tax burden on 1.5 million of Britain’s smallest businesses.

We will also move to tackle anti-competitive practices that hold back small businesses and entrepreneurs.

It is a scandal that one in five business failures are simply down to bills being paid late rather than a failed business model.  So, to help ensure small businesses get money owed to them on time, a Labour government would introduce new reporting requirements to ensure large businesses pay interest on bills paid late to their small suppliers.  This would remove large firm’s incentive to use suppliers as an unofficial credit line and would shift the burden away from disempowered small firms pursuing expensive legal challenges to their customers.

Likewise, many people will have seen the recent media furore around some large businesses’ “pay and stay” policies.  Firms always have a right to negotiate for better prices, but it cannot be fair for big businesses to charge their small supplier to go on the list of companies they might choose to buy from.  Labour were seeking action on this issue for some before it became national news.  Last autumn I brought forward new amendments to the Small Business Bill to tackle the practice.  Of course the Tory-led government voted down these plans, and so it will fall to the next Labour government to look at what action is required.

As someone who ran my own small business before standing for Parliament, I know that the smallest companies are those most vulnerable to skills shortages in the labour market.  We need to take action to help businesses recruit the staff they need, and to ensure young people are equipping themselves with the skills employers want to see.  This is why a Labour government would put employers in the driving seat, alongside rigorous new standards, to work towards a system where apprenticeships last a minimum of two years and are at level three, and that all young people study English and Maths to 18.

Perhaps most crucially of all, Labour will deliver radical reform to the banking sector to provide small businesses with a much needed injection of funding.  The failure of this government to get banks lending has been a catastrophe for small businesses, with net lending to these firms falling by a further £1 billion in the last quarter.

To address this, Labour will set up a British Investment Bank and a network of regional banks with a specific purpose to address the lending gap to small businesses. This will look to emulate the best features of the German local banking model, which oversaw an increase in small business lending during the crash. The key principles of this model – permanency through state backing; a core duty to support growth and innovation within a defined area; professionalism with banking experts who understand their local customers – can thrive in a British context, as seen by the success of institutions like the Bank of Salford.

Labour’s new industrial strategy – A Better Plan for Britain’s Prosperity – offers a route-map to sustainable growth for Britain’s working families and businesses.  This May voters have the chance to back this positive plans and leave behind the failed Tory strategy.

Toby Perkins is Labour’s Shadow Minister for Small Business and MP for Chesterfield

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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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