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Q&A with the British Chamber of Commerce

Toby was recently asked to participate in a Q&A with the British Chambers of Commerce about Labour’s plans for small business.  You can read the questions and answers below.

1) Business Bank – What measures should the next government take to improve access to growth finance for small businesses?  How does Labour plan to develop the young British Business Bank?

So far, the government’s ‘Business Bank’ has had too little impact on helping small businesses get access to the finance they need – net lending to small and medium sized firms fell by £1bn in the last quarter.

443We would properly resource the British Investment Bank by using planned fees for the mobile phone spectrum – estimated to be up to £1billion.

Alongside this we will look to emulate the best features of the German local banking model – which oversaw an increase in small business lending during the crash – with a network of regional banks.

German local banks, known as Sparkassen, are commercial banks, which are profit-making but not profit-maximising.  They are confined to lend within a specified region and have a legal responsibility to promote regional growth.

When visiting Germany, I met local Sparkassen managers who were intimately attuned to their local economies and had the authority to lend significant sums to the entrepreneurs they felt would succeed in their community.

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.

2) Business costs – How does Labour plan to tackle the UK’s ‘cost of doing business crisis’?

There is no doubt that businesses, as well as individuals, are being squeezed by the cost-of-living crisis.

At present, Britain has one of the most expensive property tax regimes in Europe as under David Cameron businesses have been hit by business rate rises of £1,500 on average.

So, a future Labour government would cut  – then freeze – business rates for small and medium sized businesses, helping 1.5 million firms.

butchers outsideLikewise, it cannot be right that that 1 in 5 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 a tough new regime where large businesses would be forced to automatically pay interest on bills paid late to their small suppliers.  This would remove large firm’s incentive to use their suppliers as an unofficial credit line and would shift the burden away from disempowered small firms pursuing expensive legal challenges to their customers, once and for all.

Just as crucially, we want to direct more custom to small companies in the first place.  This is why Labour’s Shadow Business Secretary, Chuka Umunna, brought Small Business Saturday to Britain for the first time in 2013.  On the most recent Small Business Saturday, held in December 2014, more than £500million extra was spent with small British firms.

3) Bridging gap between business and education – How does labour plan to support closer links between the worlds of education, training and employment? What role do you see for Chambers of Commerce in this?

We understand that small businesses are particularly vulnerable to skills shortages in the Labour market.

This is why a Labour government would put employers in the driving seat alongside rigorous new standards so that all apprenticeships last a minimum of two years and are at level three, and all young people study English and Maths to eighteen.

We would also drive up standards at FE colleges by requiring all new college teachers to have level two qualifications in maths and English and introduce a new Technical Baccalaureate for 16-19 year olds, a gold-standard vocational qualification.

IMG_3495To ensure that young people leave the education system with the skills businesses in their area actually need, Labour’s pioneering Waltham Forest Council are working with local businesses to appoint an “Enterprise Governor” to school governing boards.  These people have a specific remit to promote entrepreneurship as an exciting career option in their school and ensure that schools are focusing on the skills businesses need.

Labour is backing this model and encouraging other authorities to roll it out across the country.  I’m sure local Chambers of Commerce members would be ideal candidates for the role in their area.

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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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