The business community responds to Labour’s plans for British firms

IN: Business news

With fewer than eighty days until the UK election, Labour Party leader Ed Miliband set out the party’s plans for UK firms on Monday, but how have British businesses responded?

undefinedDelivering his speech at Jaguar Land Rover’s West Midlands base, Miliband set out an agenda focused on improving conditions for small businesses, stating:

“We know the jobs of tomorrow will come from a large number of small businesses, not simply a small number of large ones. And it is by helping our small and medium sized businesses of today they can become the large businesses of tomorrow.”

The Labour leader’s pledges included a promise to review access to finance for growing SMEs, through the creation of a British Investment Bank, and devolving power over ‘at least £30 billion’ worth of funding to local regions over the next five years. Miliband also outlined plans to bridge skills gaps by creating 80,000 more ‘high-quality’ training opportunities each year in the next parliament, guaranteeing a place for every school leaver who achieves grades equivalent to 2 A levels.

Finally, Miliband reiterated the party’s intention to address the issue of business rates, commenting:

“We will have a fairer tax system: keeping corporation tax the lowest in the G7, but with the first priority for us not further tax cuts for large businesses but helping smaller ones. We will cut and freeze business rates.”

In response, British Chambers of Commerce (BCC) Director General John Longworth stated:

“For some time I’ve talked about the importance of supporting small and medium firms to reach their growth aspirations. It is reassuring that Labour has acknowledged the burden of local business taxation, and improving access to finance will help.”

LoveFilm founder Simon Franks and Ecotricity’s Dale Vince have also announced their support for the party, and The Federation of Small Businesses (FSB) National Chairman John Allan has shown support for Labour’s plans to create a Small Business Administration in the style of the US organisation:

“Establishing a Small Business Administration would be a welcome step. It would ensure small businesses' concerns are heard across government, and provide focus and long-term thinking around business support.”

Despite this, a recent poll taken by entrepreneurs’ organisation The Supper Club before Monday’s announcements suggested 85 per cent of British business leaders believe a Conservative government would be better for British business, though many remain concerned about the possibility of the party offering an EU referendum.

The organisation’s founder, Duncan Cheatle, went so far as to say that:

“A Labour government today would punish all but the smallest business successes. Those with the capability to really scale a business - the true job, tax and wealth creators of our economy - would undoubtedly be better off under the Conservatives.”

David Cameron has also previously shared his thoughts on Labour’s approach to business, commenting:

“Labour want to hike up corporation tax, which new analysis shows could cost our economy over 96,000 jobs. Business is not a conspiracy of runaway profits, depressed wages, inequality and unfairness, it is the best generator of growth, wealth, work and opportunity there is.”

Cameron introduced the latest pledge in a raft of Conservative proposals aimed at supporting small businesses at the British Chambers of Commerce’s Annual Conference earlier this month, announcing a Help to Grow scheme offering £100 million worth of funding to 500 fast growing firms.

The party’s views have found support from the likes of Boots boss Stefano Pessina and Marks and Spencer’s Sir Stuart Rose, and even the BCC’s John Longworth has expressed concern over Labour’s intention to extend paternity leave, explaining:

“Although well-meaning, proposals such as this create very real costs for businesses, which can in turn lead to reduced productivity, reduced growth and fewer jobs. Businesses have already had to absorb more than half-a-dozen changes to parental leave in the past decade.”

Business owners, share your thoughts on each party’s proposals for SMEs with Aldermore on Twitter.

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