Here are the policies needed to help the SME community get back on its feet


by Ibrahim Dogus


Keir Starmer has picked apart the government’s erratic handling of the coronavirus crisis. The Labour leader has rightly shone a light on ministers’ stop-start approach to lockdowns, confused public messaging and piecemeal support for business over the last 18 months. Now, Britain is getting back on its feet – thanks to the brilliance of the scientific community in designing the vaccine and the NHS in delivering its rollout.

Just as it will be a slow and careful road back to normality for much of society, so it will be a gradual return to prosperity for the small businesses that make up the backbone of the UK economy – if they have been able to reopen at all. I want to speak up today for the small and medium-sized enterprises (SMEs).

Anyone who is active in this vibrant community, whether as an owner, funder, employee, contractor, union rep or policymaker, deserves high praise for the grit and determination they have shown since the onset of the pandemic. As we all know, the world of small business is very different to that imagined in the aftermath of the 2019 general election.

The pandemic robbed some of us of our loved ones and took its toll on the physical, mental and emotional health of many more. Others have seen the huge impact of Covid-19 jeopardise or sadly, in some cases, bring to an end the hopes of success for small and medium-sized enterprises, as well as for prosperous self-employment. In response to this, a lot has been offered by the government – but more is required.

This unprecedented global virus prompted the furlough scheme, which is set to cost around £60bn, in itself a staggering sum. Yet Tory ministers could and should have done things differently. Yes, they intervened early as the scale of Covid began to be visible in spring 2020 but, as the pandemic wore on, the Treasury failed to show the flexibility and imagination required to steer millions of small firms through the crisis.

These are the policy changes now required to help the SME community get back on its feet:

  • Extend until December 2022 the VAT reduction for the tourism and hospitality, which is due to expire next month.
  • Restore until December 2022 a full business rates holiday and scrap the partial relief, which is due to expire in March next year.
  • Restore tax forbearance for SMEs and end the injustice by which HMRC is slapping interest charges on small firms who delayed payment amid the pandemic.
  • Retain a reduced furlough scheme for sectors hit hardest by lockdowns, such as tourism and hospitality.
  • Revise the outdated system of business rates – an inflexible, fixed tax – and bring in a levy based on each trader’s turnover or profits.
  • Reform business taxation to level the playing field between the major online retailers and bricks-and-mortar SMEs.
  • Rewrite the rules on rents which are often the biggest bill for small firms. This should include a shift from fixed quarterly payments to a system based on turnover.

I have worked with SME4Labour throughout the crisis to try generate ideas, policy and a comradely spirit amid tough times. We are proud to have done so much to help small firms over the last 18 months.

Together, we ran sessions including: Impact of Covid-19 Pandemic on Small Businesses and Self-Employed People, Scottish Labour Party’s response to the budget’s impact on Self-employed and small businesses in Scotland, Latest Opinion Polls and What They Mean for Labour; How Britain Ends: English Nationalism and the Rebirth of Four Nations, with party general secretary David Evans; and Lessons from the Biden-Harris victory for UK Labour. We are so grateful members for taking part, whether as speakers, sponsors or guests as we met over Zoom in all four corners of Britain.

Much more is planned for SME4Labour over the next year. We have with our partners, Labour Business, Community Union, IPSE and many others, planned more than 30 events for party conference – a record for our organisation – and we are planning to put entrepreneurship back at the heart of Labour policymaking as Britain begins to emerge from the pandemic.

Thank you to all of our MPs, councillors, peers and trade unions for all their support for this wonderful organisation. We are here to help small firms up and down the country and we look forwarding to growing bigger and better by meeting online and in-person over the next year. Keep well, stay safe and let’s work together to make our party and country thrive again.