Entrepreneurial In-Roads: Why the U.K.'s New Labour Leader Gained the Unlikely Support of Business
Entrepreneurial In-Roads: Why the U.K.'s New Labour Leader Gained the Unlikely Support of Business
As a small business owner I am often frowned upon for backing Labour. “You run a business, surely you support the Conservatives,” ask my Tory-supporting acquaintances, somewhat aghast that I would even consider backing anyone but a political party with a pro-business manifesto.
Intent on exploiting what they saw as Labour’s weak spot, the Tory pre-election strategy was full of references supporting entrepreneurs big and small. “We will cut red tape, boost start-ups and small businesses,” Conservatives gloried in a Party manifesto in April.
Several months down the line, I have seen little of the business support to start-ups and small businesses the Tories promised. In fact I’ve seen the opposite. With yet more funding cuts made to the Department for Business, Innovation and Skills, businesses are finding it harder to secure employees with the right skills set – a position that hardly contributes to a buoyant pro-business economy.
Instead, many small business owners and entrepreneurs are looking to an unlikely figure to give them business support and power: the left-wing, austerity-rejecting Labour leader Jeremy Corbyn.
Before launching his "better business" plan, Corbyn spoke of his commitment to championing small businesses and entrepreneurialism, while criticizing the government for its big corporate welfare lobbying. “The current government seems to think ‘pro-business’ means giving the green light to corporate tax avoiders and private monopolies," Corbyn said.
"I will stand up for small businesses, independent entrepreneurs, and the growing number of enterprises that want to cooperate and innovate for the public good.”
Aiming to broaden popular appeal to his party with a pro-entrepreneurial "better business" plan, Corbyn represents a shake-up to traditional left-wing politics in Britain – and has touched a chord among workers and business owners alike. Being a small business owner myself in a rural part of the north of England, I am particularly keen to hear how Corbyn plans to help British businesses – especially small businesses that are not confined to London and the south east.
Launched during the Labour leadership campaign this summer, the Corbyn for Business platform includes a small business rate freeze and modest increases in corporation tax. The plan includes giving self-employed people greater support and reviewing social security arrangements for small business owners and self-employed workers to ensure they're entitled to receive the same social security as traditional employees.
Another key measure of Corbyn's "better business" plan would put rent controls in place to help prevent local shops and small businesses from being priced out of the real estate market. This measure may prove particularly welcomed by small and medium-sized businesses in London, which are finding it more and more difficult to make a living in the capital due to high property rental costs.
According to research compiled by commercial property advisors CBRE, commercial rent in some parts of London increased by 13.5 per cent in 2014, making it one of the most expensive cities in the world to rent property. Independent analysts have said that because of the escalating cost of commercial property, many small retailers and start-ups have moved out of central London.
Furthermore, following a change to planning rules, small businesses are being increasingly priced out of London office space that is being bought by developers to convert into housing.
But it’s not just London businesses that are facing a commercial rental crisis. In my local town in rural Derbyshire, the price of commercial property rent has become so high that several local businesses have been forced to close, while others simply cannot afford to move in. Consequently, the local economy suffers as a high street has emerged full of closed shops and unused commercial buildings.
Corbyn’s fairer rent price policy that puts controls on the cost of rent to prevent small businesses being priced out is therefore not only likely to be lapped up by many small and medium sized businesses, but will also ultimately help communities like my town of New Mills to prosper.
Digital Equality
Despite being the seventh richest nation on earth, Britain still suffers a deep digital divide – which is why Corbyn’s pro-business plan also includes making digital investments to improve the U.K.’s digital infrastructure. Royal Geographical Society, the U.K.’s professional body for geography, released a paper about tackling the U.K.’s digital divide, and asserted that around 30% of homes in Britain lack any kind of access to IT. The research found that access to broadband in remoter rural areas of Britain in patchy to say the least.
Corbyn’s "Digital Investment" policy, which includes making public investment to improve the country’s digital infrastructure and help ensure businesses in rural communities have access to high speed Internet, is likely to be welcomed from businesses struggling to compete in a less digitally able environment.
Investing in Training
Another key promise in Corbyn’s "better business" plan is to increase spending on training to create a more skilled workforce. Earlier this year, Chancellor George Osborne announced the Department for Education and the Department for Business, Innovation and Skills would face almost a billion pounds of spending cuts. Each department would have to create an extra £450 million in savings in the 2015-16 financial year. The cuts, according to Osborne, are part of the Tories’ measures to make a £4.5 billion deficit reduction this year.
The harsh cuts in education and training are seen as a particular blow to the Further Education (FE) sector. So concerned is the U.K.’s Association of Colleges that they're worried adult further education will be a thing of the past by 2020 if the cuts continue at their present rate.
David Hughes, chief executive of the adult learning body Niace, spoke of how the cuts will make it much tougher for hard-working people to improve their career prospects. “We need to see a secure skills settlement from the government so that businesses can have the confidence to invest in training and upskilling their staff,” Hughes told the Times Educational Supplement.
It doesn’t take an economist to know that skilled workforces are what help businesses nurture and develop, and that thriving businesses are what help economies grow. Nor is it a secret that Britain is facing its worse skills shortage in 30 years. Companies and trade unions are warning that talent gaps and skills shortages, which have been pinned on the continuing decline in apprenticeships, are threatening the economy.
As Cameron and Osborne make further cuts to the education and training sector, slicing a third of the budget since the 2010 election, Britain now finds itself facing even greater skills shortages than before – hardly the work of a so-called pro-business government committed to getting the economy back on its feet.
By contrast, Jeremy Corbyn said, "My ‘Better Business’ plan will level the playing field between small businesses and their workers who are being made to wait in the queue behind the big corporate welfare lobby the Tories are funded by and obsessed with.”
Many believe Corbyn’s investment-heavy policies like the ones mapped out in his "better business" manifesto – including freezing the small business rate, investing in renewable energy to bring down energy bills and introducing a higher minimum wage – will come at the cost to the economy.
As Corbyn’s fellow Labour leadership candidate Andy Burnham said about the possibility of Corbyn winning the next general election: "It is possible. But I would say without a credible vision on the economy I think it is difficult.”
But by introducing pro-business and entrepreneurial policies, Corbyn is providing a new pragmatic vision to traditional left policies. By putting more power and money in the hands of businesses, by clamping down on corporate tax avoidance in a move to put small businesses on a more level playing field with large multinationals, and by boosting disposable income through a higher minimum wage and lower housing costs, it's difficult to argue how Corbyn’s Britain would suffer economically.
The bigger question is: Can Corbyn hold on to his left-wing values in the process?
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Jeremy Corbyn’s fairer rent price policy, which puts controls on the cost of rent to prevent small businesses being priced out of the soaring market, is one of many incentives for entrepreneurs and small business owners to back him and his party.
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