Labour promises help for small businesses

Gordon Brown’s recent address to the Labour Party faithful in Blackpool promised more help for small businesses and the self-employed.

But critics have suggested that these fine words fail to match up to Labour’s record since it came to power five years ago.

The government is to “modernise” its attitude to smaller companies as part of a drive to style itself as the party of small business and the self-employed.

Addressing the conference, the Chancellor of the Exchequer claimed that the government would work with local councils and agencies to open up access to capital, advice and skills.

“Because enterprise is not just an engine of wealth creation but an engine of opportunity for all, we must as a party modernise our attitudes to enterprise,” he said.

“Let our party be the pro-enterprise as well as the pro-fairness party. Labour: the party of small businesses and the self-employed in Britain just as much as we have always been, and are, the party of employees.”

Brown maintained that the focus would be on disadvantaged areas of the country.

“For every three small businesses creating jobs in the best-off areas, there is just one, creating far fewer jobs, in the poorest areas,” he told delegates.

He said that, by working in partnership with local authorities and regional development agencies, the government would designate 2,000 new enterprise areas.

These would “encourage home-grown economic activity by cutting the cost of starting up, investing, hiring, managing the payroll, eliminating stamp duty, making it easier to start and grow a business and create new jobs”.

The British Chambers of Commerce (BCC) gave a qualified welcome to Brown’s speech.

Director general David Frost said: “The BCC welcomes the government’s enthusiasm for working with small businesses and the self-employed. We look forward to working with them in developing the enterprise economy.

“[But] if government genuinely wants to work with small businesses then it must address the problems that they currently face.

“Some of these problems have been created by the government, such as regulation and red tape costing business £15.6bn, according to the government’s own figures, and the rise in NI contributions from the last budget set to cost an extra £3.5bn from April 2003.

“If measures for the self-employed, such as IR35, are included then the government has a long way to go to be seen as small business and self-employed friendly. Reducing this burden would be a good start.”

Shadow chancellor Michael Howard derided as “laughable” Labour’s claims to be the party of small business.

“Businesses big and small are suffering under red tape imposed by Labour. Last year the government introduced 4,642 new regulations, one for every 26 minutes of the working day,” he said.

This article first appeared in Accountancy Age magazine.

Related reading

HMRC banknotes