Why Labour Must Champion Small Business

An office scene overlayed with a florist, delivery driver and dressmaker.

Self-employment and entrepreneurship have traditionally been claimed by the political right, but the truth is, the Tories have long ceased to be the party of business, unless of course it’s their mate’s business and there’s a PPE contract involved.

In particular they have abandoned small businesses – failing to listen to concerns over Brexit, and having no real remedy for the decline of the high street, an issue long before Covid or the current energy crisis.

There is no reason why Labour can’t be loud and proud in its support for small businesses and the self-employed. Working with businesses is not new for many of us –  Labour MP’s and councillors do much more than post pictures of themselves at their local bakery, curry house or workspace – we work tirelessly to support them, from signposting to covid grants in the pandemic, to improving town centres, to helping them navigate the more mundane issues of vandalism and commercial waste.

Rights in every size of business

In order for self-employment to be accessible to those that want it and sustainable even in hard times, we urgently need reforms to workers’ rights.

There is a proud tradition of unionised self-employment in the original gig economies of music and theatre, where collective bargaining has won better pay and conditions. While in the modern, tech-led gig economy, exploitative bogus self-employment has been rightly challenged by unions.

Employees in the UK have the lowest rate of sick pay in western Europe, and the self-employed get nothing at all. An income replacement to provide the basics in the event of illness is the minimum we should be providing to all workers. This will pay for itself by reducing the spread of infections at work, reducing absences and reducing the strain on the NHS.

Another area where the self-employed have been kept back is parental leave – as I found to my detriment when I became a mum, and has driven me to campaign for change. The current system of Maternity Allowance cripples mothers’ businesses by effectively banning them from working while on leave, and completely excludes fathers and adopters from taking any paid leave at all.

While the Equality Act provides protection from discrimination to many self-employed people, there are still grey areas, and some workers fall through the cracks. Many freelancers also work in complex yet informal structures, where a legal duty on employers to protect employees and freelancers from third-party harassment  is urgently needed to keep people safe.

Saving the High Street

Another huge issue facing small businesses is our antiquated business-rates system, which is pushing businesses to breaking-point, as inflation and energy costs rise, never mind the sudden and unexpected additional cost of borrowing following the Kami-kwaze budget.

Labour’s proposal for reforming business rates would bring a much-needed rebalance of business taxation in favour of bricks-and-mortar businesses, who often do so much more for their communities than simply sell goods, while introducing a more proportional digital services tax to ensure online retailers pay their fair share. A business-rates rebate for at-risk business is the minimum the government must do to straightaway to stop further shuttering of our high-streets.

With more people working from home, and car journeys becoming more expensive and harder to justify, our communities need thriving high-streets, with small, independent businesses who employ and invest locally, more than ever. We have the opportunity not just to halt the decline of our high streets, but to nurture good local jobs that people are passionate about and invested in, both financially and emotionally.

Moving business and the country forward

The pandemic hit many businesses hard, particularly in the hospitality and entertainment sectors, and 3 million directors of Ltd companies or those with new or part-time businesses were denied any help with living costs.

The number of self-employed people is down 5% since Covid, and we haven’t even begun to see the damage that rising bills and supply costs will cause to countless small firms up and down the country.

Resilience is at rock-bottom after two years of disruption, with many still paying back Covid loans and in no position to cover the soaring costs when energy contracts are renewed. The new PM’s buy now, pay later approach to energy support means that these same businesses will see increased fuel bills long into the future as energy companies service their government-backed debts.

While Liz Truss goes back to her free market fundamentals we have the opportunity to give real support to our small businesses and self-employed people where we hold power. And at a national level present our vision for a thriving small business sector that enriches local communities both economically and culturally.

A new employment bill, tabled by a Labour Government will finally be the chance to fill the gaps in the legislation and make self-employment safe, accessible and sustainable for those that  choose it.

To find out more about how Labour can win over the business-minded voter, see How Labour Can Win The Economic Argument by Jeevun Sandher.