Businesses in Manchester, Birmingham, and Glasgow will have been busy of late, with the major political parties descending on the three cities for their annual conferences over recent weeks. This year’s conference season is the last big push ahead of next year’s General Election, and the politicians have all been urging the voting public they can offer them what they want if elected to power next May.
The small business community believes it already knows what it needs to change. The Federation of Small Businesses talked to its members, and published its manifesto for the next Government just ahead of the conferences, highlighting the following priorities:
- Put SMEs at the centre of policy-making by creating a dedicated UK Small Business Administration.
- Promote alternative finance for SMEs, plus increase competition in the banking sector to give small firms more choice.
- Tackle late payment and extended payment terms. Also, improve access to public sector contracts.
- Help businesses invest by setting generous annual investment allowances.
- Make business support schemes more efficient, simplify research and development initiatives, and improve export support.
So, that’s what small business owners want. But what were the UK’s three biggest parties offering in their recent speeches?
The Labour Party
Labour kicked off the conference season in Manchester a fortnight ago, though party leader Ed Miliband was criticised for failing to address the economy in his speech. The main Opposition messages for SMEs came from Chukka Ummana, the Shadow Business Secretary, and Shadow Small Business Minister Toby Perkins. They called for:
- Greater power devolved to the regions to give businesses more control over economic development in their areas.
- More investment for high quality apprenticeships and new technical degrees to help plug vocational skills shortages. Labour proposes that as many school leavers should become apprentices as currently go to university.
- Whitehall should free up budgets to help small companies win contracts to deliver goods and services for the public sector.
- Miliband spoke out for the self-employed, saying these small-scale entrepreneurs should be helped to get mortgages and pensions.
- Businesses operating in green technologies would receive more support, backed by the introduction of borrowing powers for the Green Investment Bank.
- Apprenticeships were also on the Tories’ agenda, with a commitment to increase the number of new apprentices to three million over the next five years funded by further cuts and a freeze on welfare payments for people of working age.
- Regions outside of London and the South East would get greater support to improve infrastructure and business development through links with universities, investment in big science projects, and the building of high-speed transport links.
The Liberal Democrats
The partners in the Coalition Government wound up their annual conference in Scotland this week, and the Lib Dems were at great pains to point out the ways in which they differ from their Tory peers. But, away from the defensive rhetoric, the party did have time to make a few pledges to small firms.
- Vince Cable, the Business Secretary, promised a review into workers’ rights that would help employers avoid employment tribunal claims, and help them to employ staff on the right contracts.
- He also recommended that the lowest-paid apprentices, those in their first year, earn £1 more an hour, and that degree-level advanced apprenticeships be extended.
Away from the rostrum, Cable also suggested that there will be good news for small companies in the Chancellor’s Autumn Statement in December, announcing business rates relief for some SMEs, though this wasn’t revealed in any detail at either the Conservative or Liberal Democrat gatherings.
What was missing from all of the party events was any real mention of SMEs’ desperate need for access to finance, the greatest obstacle that many small firms currently face. And new research suggests that businesses need more help than ever, since Government money is doing little to help firms left out in the cold by the banks. Just one in ten entrepreneurs secured a Government grant or loan in the first half of this year, according to Axa Business Insurance. A quarter of business owners have been forced to rely on their credit card for help, about 27 per cent used their overdraft, while 18 per cent turned to family and friends for financial support. Many of them simply don’t know about alternative sources of finance, and how to gain access to them.
All in all, the major parties have yet to persuade entrepreneurs that voting for them will improve their lot in general, and their ability to find funding for their businesses, in particular. Then, there’s the challenge being posed by UKIP, which is appealing to SME voters by promising the removal of regulatory burdens imposed by Europe. With eight months to go before polling day, the politicians still have time to address the small business community and its needs. But, if they hope to win the valuable votes of the UK’s 4.9 million SMEs, they have a lot more work to do so.
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