25 September 2018
Labour Party Conference
SME4Labour collaborated with the Association of Independent Professionals and the Self-Employed to host a 'Small Business Question Time' at Labour Party Conference 2018
A selection of photos can be found here.
After Ayesha Hazarika introduced the panel, the debate kicked off with a question on how the Labour Party can convince SMEs to vote for them and what policies they would propose to tackle the late payments, withheld payments, and non-payments that SMEs constantly suffer. Alison McGovern MP, answering first, explained that Labour had been trying to tackle late payment for a long time, without much success, and suggested a new approach was required. Rather than trying to cajole businesses into paying people in a timely fashion, McGovern, drawing on her experience of sitting on the Treasury Select Committee, proposed that transparency should be required of companies. Companies should report on the timeliness of their payments in the same manner that they report on the gender pay gap, and naming and shaming poor performing companies could be an effective incentive for companies to pay their contractors in a timely and consistent manner.
Simon McVicker of IPSE highlighted the importance of non-payments. McVicker cited the findings of their own research, that 43% of freelancers have completed work they were not paid for, which increased to 58% for 18-34-year olds. IPSE supports greater powers for the small business commissioner, and believes the current commissioner should make more use of its current powers to name and shame companies with a poor track record of paying contractors. IPSE also supports co-operatives which would allow SMEs to take up issues collectively.
Adam Payne began his response by noting that 11% of SMEs are owed £100,000 or more, and 58% of SMEs feel the issue of late or no payments threaten their future. This, Payne contended, is not only scandalous but unsustainable. Payne agreed with McGovern’s ideas on increased transparency and argued that it was in the public interest to report poorly performing companies.
The second question queried what a future Labour government might do about the gig economy. McVicker replied first to highlight the importance of clarifying the difference between those in the gig economy and those who are self-employed. Research shows that there is no single definition of self-employment and thus there cannot be a one-size fits all definition. Definitions and distinctions between workers and employees are complex and controversial and should not be left to the courts. It is time for the policy makers to step up, with the aid of expert opinion.
McGovern explained the inception of the term ‘gig economy’ originated from musicians who would ‘gig’ alongside their day job. This sort of creativity should not be stifled, nor confused with ordinary full-time employment. McGovern agreed on the importance of defining these terms, and the rights of employees and the responsibilities of employers. McGovern criticised the Taylor Report’s shortcomings, especially regarding the importance of trade unions. Trade unions should be considered an essential component of civil society and of our democracy, not as interest groups relevant only to their own members.
Payne advised any future Labour government to take their time researching the gig economy question. While cases like the Gary Smith versus Pimlico Plumbers put issues pertaining to the gig economy on the map, it was a unique case and not necessarily representative of the issues workers in the gig economy are facing.
At this point, John McDonnell MP joined the debate and explained that before the last general election the Labour Party has set up a working group from the Federation of Small Businesses to look at a number of issues pertaining to the gig economy and self-employment. With representatives from the Institute of Employment Rights, members of the shadow front bench, and members of trade unions, they have been working to secure a clearer definition of self-employment, as requested by the Federation of Small Businesses. McDonnell echoed McGovern’s criticism of the Taylor Report and concluded that ultimately, society cannot continue with such levels of low pay, exploitation, and abuse. While there will always be an element of flexibility, protecting workers’ rights and guaranteeing a certain number of hours is a priority.
Given that SMEs are going to be significantly affected by Brexit, the third question asked, what is Labour going to do to support SMEs as it comes to pass?
McDonnell replied with scathing criticism of the current Brexit negotiations by the Conservative Party. While the current leadership are unable to negotiate a deal that can satisfactorily protect jobs, McDonnell argued, the Labour Party have built and sustained a strong relationship with Brussels and are ready to step in to take over negotiations.
McGovern, agreeing with McDonnell’s sentiments, emphasised her opinion that the Labour Party are ready step into negotiations by criticising Labour MP Barry Gardiner’s comment on Twitter that “Never interrupt your enemy when they are making a mistake” as unwise. McGovern, referring to a potential ‘People’s Vote’, asserted that ‘Remain’ must be on the ballot paper. Refocusing on SMEs, she agreed with the questioner that – from her perspective on the Treasury Select Committee – their voices were not being heard.
Next, Payne answered the question with a critique of Labour Party policy on the single market. Payne accused the Labour leadership of “cherry-picking” and claimed that given the magnitude and importance of Brexit, the Labour leadership had a “moral duty” to provide a more coherent and detailed alternative to the current Conservative Party position.
McVicker accused the government of lacking coherence and implored the Conservative Party to listen to businesses.
Stephen Kinnock MP joined the debate and argued that we need an active state, which – without micromanaging businesses – gives them an opportunity and a platform to work, and the advice and the support they need. Kinnock agreed that a small business administration is required, similar to the US set-up, which is effectively a ‘one-stop shop’ for all SME needs. At the debate’s conclusion, Kinnock called for a holistic approach to SME, with the foundation of an agency and an institution for SME needs.
John McDonnell MP is Shadow Chancellor of the Exchequer and leads the Labour Party's policy making on economics.
Alison McGovern MP is one of the Labour Party’s most outspoken backbenchers. She has previously held a variety of shadow front-bench posts and led a number of campaigns focused on the local economy in her South Wirral constituency.
Simon McVicker is the Director of Policy at the Association of Independent Professionals and the Self-Employed (IPSE). He has more than 25 years' experience in the fields of policy and public affairs.
Adam Payne is a political reporter for Business Insider. One of the UK’s best young journalists, he received the judges' high commendation at the 2018 "30 Under 30” media awards.