Conservatives or Labour, who loves small business most?
The country’s political powerhouses have set out their stall for 2015 – they need the small business vote. But who do you trust?
There’s a scene in Monty Python’s The Life of Brian, where Brian seeks to curry favour with a political movement, insisting he really does hate the Romans. “Oh, yeah? How much?”, “A lot,” comes his reply. It’s enough to gain their trust.
Posturing is one thing, but small businesses want proof from the major political parties that they really do care as much as they say they do. In his speech at the Conservative Party conference in Manchester yesterday, chancellor George Osborne did more of the former, but sought to do some of the latter too.
Confirming the Tories have every intention of locking horns with Labour to secure the affections of the small business community, they announced plans to deliver the oft-promised Red Tape bonfire, said they hope to freeze fuel duty until the next election in 2015, and unveiled West Ham United vice-chairman and The Apprentice star Karren Brady as the party’s latest household name ambassador.
Like a stag challenged for its supremacy and recognising any more perceived neglect will not be tolerated at the ballot box, Osborne was keen to defend the party’s small business record. Using the terminology of City AM, the square mile’s most ardent mouthpiece, the chancellor cried that Labour’s plans for an energy price freeze and a corporation tax rise amounted to “declaring war on enterprise”.
With business minister Michael Fallon hinting that the Conservatives would give new businesses a near-total Red Tape exemption – bar the absolute necessary employment, health and safety regulations – and Karren Brady calling Osborne “the right man, with the right plan”, the Tory hierarchy hoped to smack down any threat in a key battleground.
Osborne reaffirmed the Tories’ commitment to enterprise. “We Conservatives are nothing if we’re not the party of small business, and that’s the way it’s going to stay,” he said, reminding the audience of his family’s entrepreneurial heritage. Just a week earlier Labour leader Ed Miliband had proclaimed a “One Nation Labour. The party of small business.”
The battle for small
With four and a half million small business owners in the UK, 95% of whom run micro-businesses (fewer than 10 employees), it’s no wonder the Conservatives fear losing such an influential portion of the electorate. Because it’s not just the owners like you, it’s your partners and employees, who rely so heavily on your ability to generate an income to sustain them all.
Perhaps the politicians, most of whom have never started or grown their own businesses, are beginning to grasp the amorphous make-up of the small business community – from the home-run franchise opportunity to the fast-growth Tech City start-up, and from the local plumber to a family business with 100 staff.
Miliband was wrongly dismissed by City AM’s incendiary ‘Labour declares war on business’ headline, as he was attempting to do precisely the opposite with a policy of mass appeal. The weekday free paper read by an influential 127,000 City workers used the term business far too loosely, ignoring the vast majority of those in business who may yet take another view.
“Now many of the new jobs in the future will come from a large number of small businesses not a small number of large businesses,” said Miliband, successfully riling the corporate end of the spectrum. “And this is really important. If you think 15 years ahead, the rate of change and dynamism is so great that most of the new jobs that will be being done will be by companies that don’t yet exist.”
Miliband went on to state a need for a shift in the priorities of government. He pointed to the £6bn cut in taxes for large businesses since the Coalition formed and that small businesses have been “short-changed”. His 1% corporation tax rise affecting around 80,000 larger companies, which would generate around £800m, sought to readdress what he sees as an imbalance.
Instead, more than £300m generated from the rise, he said, would be ploughed directly into cutting business rates for one and a half million small businesses. This, said Miliband, would amount to at least £450 a year saved for each business. Whether the sum is enough to draw business owners close and whether his energy price freeze is practicable remains to be seen.
Predictably, Osborne used his platform in Manchester to deliver some damaging blows to his economic adversary. “Labour increased small business tax. I’ve cut it,” bludgeoned Osborne. “Labour were extending business rates to the smallest firms. I’ve exempted them.”
And he pointed to the Employment Allowance, promising that a third of all the businesses would be taken out of paying national insurance altogether. While ridiculing his Liberal Democrat colleagues in government, Osborne turned more scorn on Labour: “At least they [Lib-Dems] had an economic debate. Labour’s economic announcements amounted to: Declaring war on enterprise; a tax rise on business; and an apprenticeship policy that turned out to be illegal.
“And then there was the energy announcement that completely unravelled. Any politician would love to tell you that they can wave a magic wand and freeze your energy bill. Everyone wants cheaper energy. So we’re legislating to put everyone on the cheapest tariff.
“But I’ll tell you what happens when you draw up policy on the back of a fag packet. Companies would just jack up their prices before the freeze so in the short term, prices go up. And companies would not invest in this country and build the power stations we need – so in the long term, prices go up.
“So that’s Labour’s offer: Get hammered with high prices now. Get hammered with high prices later.”
The question is, which of the country’s leading political parties really loves small business more? You will decide.