Beating the Tories on Business – How Labour Can Win the Battle for SME Hearts and Minds Again

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21st November 2017 – SME4Labour held a roundtable discussion in Parliament about how the Labour Party can beat the Tories on business and re-establish itself as the party of - and for - small and medium-sized enterprise (SME) owners and workers. The session was kindly hosted by Jack Dromey MP, Shadow Minister for Labour. Shadow Secretary of State for Business Bill Esterson MP joined Mr. Dromey for the session. Rehana Ameer, councillor in the City of London and an SME owner, kindly chaired the event, and our panel of speakers featured Hamish Sandison, chair of Labour Business, Simon Lydiard, former civil servant, and Emma Barnes, owner of Wild Fawn jewellery. 

PHOTOS

Chair Rehana Ameer introduced the event and the speakers before Jack Dromey MP spoke about his parents’ experience as SME owners, and the opportunities and challenges that come with running your own business. He went on to talk about his experience as a Birmingham MP, outlining the Birmingham business landscape - giving the example of the Jewellery Quarter as a home to world class, world renowned jewellery makers, and the example of Jaguar Land Rover in his constituency of Erdington. He celebrated that business is now talking to Labour again after some period of distance, both because of the uncertainties around Brexit and Labour’s impressive performance at the General Election, meaning Labour is perceived to be a government in waiting. He cautioned, though, that Labour needs to do more to win the business community’s support.

Bill Esterson MP spoke about how Labour is pro-business but against the type of “short-termist behaviour”, such as in the City, that has blighted the UK’s economy for too long. He too spoke about his personal links to SMEs, telling of his grandfather’s cornershop in the East End of London and his wife’s current experience as an SME owner. Mr. Esterson spoke about the challenges SME owners face – challenges such as late payments, business rates and lack of access to finance, and the injustice of the way banks treated SMEs in the wake of the financial crisis, which he said had led to suicides among small business owners struggling to make ends meet. He talked about the need for a sustainable economic model and said that the Tories have done nothing to challenge the structural weaknesses of our economy – unsurprising for “the party of a handful of big corporations”. Labour, he said, would raise taxes but businesses with profits of £300,000 and under would benefit from the reintroduction of the small businesses corporation tax rate. Esterson went on to comment on the issue of procurement, comparing the UK to much better procurement regimes in the US and on the continent, and talked up the benefits of Labour’s planed national investment bank with regional arms. He heralded the 2017 manifesto, developed in partnership with SMEs.

Chair Rehana Ameer gave some facts and figures on SMEs from Federation of Small Business (FSB) research before inviting Hamish Sandison to speak. Mr. Sandison said that Labour needs to do three things: (1) bust the myth that the Tories are the party of business, (2) reposition Labour as the “natural party of business” (to paraphrase Harold Wilson), and (3) listen to business and go beyond traditional comfort zones on the doorstep. He said that businesses are frustrated with the Tories’ inability to tackle the key issues facing them, such as the productivity gap and lack of investment, and noted that the Tories couldn’t event produce their traditional letter from the ‘captains’ of industry at the 2017 general election. Labour, on the other hand, was able to do so – representing a shift in business thinking in relation to the two main parties. While Labour is the party of business, the Tories are simply the party of irresponsible hedge funds. Mr. Sandison said that business wants what people want – a good, well-funded health service, for example, with effective preventative health care that will reduce days lost to sickness and help boost worker productivity. He praised John McDonnell’s work as Shadow Chancellor and the economic forums he has shared with him. Mr. Sandison promoted his organisation Labour Business’ initiative for a Business liaison officer – or BuLo – in every constituency Labour Party to work with the Trade Union Liaison officer, and to do the necessary grassroots work in linking up with SMEs in communities up and down the country.  

Emma Barnes spoke about her eco jewellery business Wild Fawn, which consists of Emma herself plus two employees, and has been going for 3 years. She makes uses of the online platform Etsy and sells her items in various countries, including Germany, where her products are particularly popular. She outlined a number of issues that her small business and the businesses of fellow jewellery makers face. These include the VAT threshold, which can deter some businesses from expanding, inequality of access to good accountancy and asymmetry of information when compared to big business, and issues around competitiveness and the costs of imports. Ms Barnes spoke about the benefits of the internet in facilitating start-ups and expansion, and how young people need greater education and training to help them get started in a changing economy, generating a whole new generation of well-equipped SME owners.

Simon Lydiard, recently retired from the civil service, opened by joking that he was in the civil service for a longer period of time than the recently deposed Robert Mugabe was President of Zimbabwe. He informed us that procurement is worth £200bn per year and that if more of the pot of money went to SMEs rather than big companies, it would provide a major boost to local economies. The government has a target of 33% SME spend on procurement by 2022, but this has already been put back by 2 years. Mr. Lydiard said that the government’s Contract Finder online system for SME procurement is a difficult tool and not all contracts that should be listed actually end up on the system. He said that the Coalition and Tory governments have had “no vision” to offer SMEs, just targets. He spoke about his report on SMEs and gave the example of the construction sector, where 70% of construction is done by SMEs but only 5% of government spend on construction goes to SMEs. He said that, tellingly, the better performing departments do manage get spending to SMEs. Lydiard spoke positively about project banks in tackling late payment, and advocated establishing non-executive director positions in government departments for SMEs in order to change the culture and practice of government departments. He expressed concern that the big consultancy companies dominate Whitehall, locking out SMEs from key decision making. Mr. Lydiard seconded Hamish Sandison’s praise for John McDonnell, saying he is one of Labour’s best media performers in his role as Shadow Chancellor, arguing for an economy of sustainable investment and inclusive growth.

In the roundtable discussion after our panellists’ speeches, we discussed how to talk to voters about business on the doorstep, how to challenge old prejudices about Labour being ‘anti-business’, how we should challenge the idea that small business and big business’ interests always align, and why we should be championing good practice among businesses. 

 


 

Speaker bios

Hamish Sandison chairs Labour Business. He is a consultant with the international law firm Fieldfisher, specialising in IT law, intellectual property and public procurement. He is dual-qualified as a solicitor in England and Wales, and as a US attorney. Hamish has been a member of the Executive Committee of the Labour Business (formerly the Labour Finance and Industry Group) since 2013, and was elected as its Chairman in 2015. He stood as Labour’s candidate for Police and Crime Commissioner in Gwent in 2012, and as Labour’s Parliamentary candidate in Monmouth in 2010. Hamish has law degrees from Jesus College Cambridge and Berkeley Law School in California.

Emma Barnes is the founder of handmade jewellery brand Wild Fawn Jewellery. Emma set up Wild Fawn in January 2015 whilst working full time as a statistician in the Department of Education. 10 months later, Emma left the Department to work on Wild Fawn Jewellery full time and has been working on the brand for the last two years. Emma is a self-taught silversmith and works from home with hired help two days a week to make, pack and send orders. Wild Fawn is sold online on Etsy, the official Wild Fawn website and in over 40 eco-boutiques in the UK and Europe.

Simon Lydiard is a former senior civil servant, with a 38 year career spanning several government departments and specialisms. He joined the civil service at the most junior grade and worked his way up, attaining senior civil service rank eight years before he left. Having started as a general administrator, Simon worked in HR, finance and property, before specialising in procurement mid-way though his career. He developed and led the introduction of new approaches to procurement in the civil service, working on the introduction of category management and the application of electronic business and supply chain collaboration in the MoD and, as Director of Contract Management Excellence, over-hauling the Department for Transport’s (DfT) approach to managing commercial contracts through the introduction of new models, standards and training. A particular passion for Simon has been the support of small business – DfT’s spend with small businesses increased ten-fold whilst he was their Small Business Champion. He advised on procurement aspects of the Small Business, Enterprise and Employment Act 2015. After he left the civil service, he led a review of small business procurement for the Crown Commercial Service. 

Rehana Ameer is the first Indian-born woman elected as a Councillor in the City of London Corporation’s 950 year history. She is a Councillor for Vintry Ward. She is also the first woman politician in the UK of Tamil Nadu origin. Rehana is the founder and Director of Prosap Corporation Limited in London. She possesses over 20 years in IT and Management Consulting where she has led, managed and successfully delivered large multi-million pound IT and business transformation projects for multinational companies worldwide.