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The next generation of enterpreneurs

Stephen Timms hosted a roundtable discussion on how the Labour Party can create and win the support of the next generation of entrepreneurs. The event was chaired by Martin Howe of the Executive Committee for SME 4 Labour with keynote speakers Stephen Timms MP for East Ham and Bill Esterson MP for Sefton Central at Portcullis House.

Stephen Timms MP began by applauding the work of SME 4 Labour. He stated that the current govt setup doesn’t seem to support SMEs in the way that it should, and that  is a political opportunity for Labour. He argued that the tax system needs to reflect more and more the needs of people who set up businesses for themselves and that this was an agenda Labour needs to get right.

He said that because of Brexit the whole economy faces great uncertainty and that no one knows where we’ll be in a few years’ time. He added that the Brexit select committee paid its first visit to the Department for Exiting Europe today but that there is no sign of anyone in the department or the government with a plan, and expressed support for the High Court ruling because it gives parliament a say in where Brexit goes.

He added that Research commissioned by the Federation of Small Businesses showed that in an 18-month period, 80% of people who have made the move out of this period have done so as a result of getting a job in a small business. He continued, explaining that Shoreditch and other areas present an interesting area of how small businesses have been created and this trend is expanding geographically through London.

He explained that the government has a target of 3m apprenticeship starts between 2015-2020. He said that this seems to be their only target – there’s no specification on their quality, how they contribute to the economy, and expressed worry that the government will do whatever it takes to get 3m, regardless of whether or not these apprenticeships are things that businesses need.

He added that there have been 2.4m apprenticeships in the previous 5 years – so it’s an achievable increase but there are still unclear objectives with where they are going.

In addition he explained that there is  a new apprenticeship levy due from next April  for companies with a pay bill higher than £3m a year, the government will contribute 0.5% of their paybill towards the cost of apprenticeships, estimated to raise £2.1b a year on apprenticeships and that this is very controversial amongst businesses who will be targeted. He added that the Confederation of British Industry is protesting it and says it may actually reduce apprenticeships.

Bill Esterson MP agreed that SMEs provide opportunities for criticism of government policy, and argued that on the topic of Brexit, business confidence is essential for success.

He said that the loss of long-term foreign investment into the country will cause increasing problems over time and added that the result with Nissan is vaunted, but that it is a success with one company in one part of the country and definitely is not a plan.

He argued that the target of 3m apprenticeships is dangerous and that a rush will mean that there will be a loss of quality. He also stated that projections suggest there will be a deficit of 0.5m jobs in intermediate and advanced-skilled areas including the construction sector.

He added that he  would like to see something similar to the American model, and explained that in the US they have the Small Business Administration – which is ‘a driver to the success of the economy as a whole’ as it supports advice and mentoring with an extensive network of retired entrepreneurs which is broadly superior to what is offered through the New Enterprise Allowance. He explained that they have an approach to bringing clusters together across the country with all sorts of industries and sectors like Silicon Valley.

He explained that they particularly invest in supporting business startups in more deprived communities and encouraging women as entrepreneurs. He explained that Germany, Switzerland and America are all very strong on this whereas Britain is extremely lacking in supporting apprenticeships and has nothing like this at present and that moves towards this had been advocated in Labour’s 2015 manifesto.

Bill also expressed support for the creation of a Department of International Trade but added that the focus of policy, rather than corporation tax wrangling which only benefits the small clique of large businesses, needs instead to focus on small businesses in growing sectors such as a digital and similar sectors. He also argued that Labour needs to resist Liam Fox’s desire for a low-skilled, low-paid economy in “a race to the bottom”.