Recently, I met with Roger, a local businessman. His company is small, but punches above its weight, recently picking up several awards in their field – digital marketing. In my time at his offices I learned that the cost of living crisis is as real to small businesses as it is to households – a cost of “doing business” crisis.
We talked over coffee about the state of British business – particularly the role of small business as the backbone of our local economies. He told me that he is impressed by Labour’s Shadowm Minister for Business, Chuka Ummuna – Chuka, he said, “gets small business.” I wondered aloud whether this represents a shift in the way Labour is perceived by businesses – the Conservatives, after all, have always been keen to be seen as the “Party of Business.”
My friend replied: “This government is not the friend of business – it’s the friend of big business. There’s a difference.”
Last week I met with two other key figures in the business community in Weymouth. They echoed similar sentiments. Small businesses need support, clarity of policy and investment from the government – and right now they do not feel they are getting it.
We have now found out that, because of inflation, business rates are going to increase by an average of £200 in Weymouth & Portland from next April, and by £250 in Purbeck. These rises amount to a total cost to national business of £700m! This is happening year-after-year; business rates have already gone up nationally by an average of £1,500 under David Cameron.
More than 10% of businesses now report that they spend as much on business rates as they do on rent! Why does this matter? The choice for many shops, workshops, start-up businesses and others who pay business rates is to either pass these increases on to their customers through higher prices – adding to the cost of living crisis – or face a continuing squeeze until they can no longer afford to stay in business.
Small businesses are vital to the UK. They are the driving force behind future jobs and growth, and now account for more than half of the economy and most new jobs in the next 15 years will be created by businesses which don’t yet exist.
That’s why Labour is calling for urgent action, and has pledged to cut and then freeze business rates to small businesses. This will mean an average saving of nearly £450 on 1.5 million properties.
The measure will be fully funded by not going ahead with the government’s planned corporation tax cut for multinationals in 2015, a tax cut that would only benefit 80,000 businesses; under 2 per cent of British business.
The tax cut for large multinationals at a time when rising business rates are strangling small and emerging businesses proves Roger right. This is a government that is friends only with big business – favouring the large, multinational corporations over the small business, the entrepreneurs and the artisans that are our economy’s lifeblood.
Labour – by contrast – is standing up for hard-pressed businesses as much as it is for hard-pressed families.
Simon Bowkett is the South Dorset Labour Prospective Parliamentary Candidate. Follow his campaign at www.simonbowkett.co.uk, and on Twitter @Simon_Bowkett
