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SME4Labour and Opinium research “Is Labour the party of small business?”

Ibrahim Dogus Рco-founder of SME4Labour and a former parliamentary candidate. 

The main messages from the business community have landed – and they are clear for each party.

Labour is on the up. It has further to go but the verdict is clear, with a majority of company bosses saying the party has changed for the better under Keir Starmer.

For the Tories, who have presided over supermarket shortages and a petrol crisis, their long-held reputation as the party of business is under strain.

Yes, they have enjoyed continued support from enterprise but some clear demands – for a further business rates holiday and then to go on and end the broken system of business rates – have gone unmet.

So, first, let’s look at Labour. The party is turning around its reputation under Keir Starmer.

A clear majority of business leaders, 47 per cent, said their perception of the party had improved since the leadership election, compared to 15 per cent who said it had worsened, with the remainder reporting no change.

This was one of the headline findings of Opinium polling carried out for SME4Labour, the organisation I co-founded.

The improving view of our party was more pronounced among leaders of medium-sized businesses, with 56 per cent saying their had been improvement in the party, compared to 41 per cent among sole traders.

Labour has further to go but is making progress.

For the government, however, there is pressure to take action now.

Yes, a Boris Johnson-led Tory party currently enjoy an advantage among the bosses of small and medium-sized enterprises (SMEs) of 40 to 23 per cent – but there is a clear demand for delivery following the ravages of the pandemic on our health, wealth and businesses.

Chief among these is a desire for a fairer tax system. Despite 11 years in power, four chancellors and soaring lockdown revenues for online retailers such as Amazon, this government has still stepped back from the changes required to give high street firms a fighting chance.

Three key findings tell the story of Tory dither and delay:

  • More than two thirds (68 per cent) want business taxation reformed in a way to level the playing field between the major online retailers and bricks-and-mortar SMEs.
  • The same proportion want the restoration of forbearance for taxes on SMEs and for interest charges to be stopped for firms who delayed payment during the pandemic.
  • And just under a third (64 per cent) want a business rates holiday until December 2022 rather than the partial relief that is due to expire in March next year.

The findings reflect the huge impact of multiple lockdowns on small firms who rely on trading from shops and restaurants to commuters, tourists and local regulars.

In my sector, the results were similar emphatic. Some 63 per cent surveyed want an extension to December 2022 of the VAT reduction for tourism and hospitality which is due to expire next month.

This reflects the unique set of pressures which have made the 2020s the toughest time in living memory for anyone who wants to grow a business, take on more staff and create wealth: Brexit and Covid-19.

Five years after the referendum, I will not revisit the debate around the EU here; business leaders simply want this shallow government to take action.

The ongoing impact of the pandemic is the largest challenge firms expect to face over the next 12 months with two fifths (39 percent) citing this, followed by Brexit (20 per cent). As Opinium rightly identifies, after weeks of chaos and a government scramble to issue temporary visas for foreign HGV drivers, this is having an effect on how numerous industries source their materials. A shortfall in the supply chains was cited as the third option selected (14 per cent).

You can read the research in full here.

Of course, Labour has further to go to regain in full the trust of business. I am convinced, however, that the economic team under Keir and Rachel Reeves is taking us in the right direction.

We saw this in Brighton when, in her first conference speech as shadow chancellor, Rachel pledged to scrap business rates and replace it with a fairer system.

Labour is listening and Labour is learning. By contrast, the Tories display a serial weakness in the face of legitimate demands for reform of business taxation.

Let’s carry on working with companies large and small as Britain emerges from the pandemic. Let’s put together the policies to ensure Labour is the true party of enterprise.

Ibrahim Dogus is co-founder of SME4Labour and a former parliamentary candidate.