The Blog

In One Speech, Ed Miliband Has Done More for Small Business Than This Government Has in Three Years

Labour understands that the people who go out and work long, hard hours to build up a business and create wealth and value to communities are not simply Treasury cash cows. They need help and support. The Tories have long forgotten this.

There was a time when the Tories instinctively understood small business. Margaret Thatcher was brought up in one. She knew they were the lifeblood and heartbeat of our economy. But that's all ancient history now - and the modern Tory leadership has long lost this umbilical connection. They no longer get it. "Wherever you look in Whitehall," complained the senior Conservative, David Davis, "the Government is too close to big business." It certainly is - and in this parliament small business has been routinely ignored and treated like an embarrassing relative.

Davis' criticism of the "crony capitalism" at the heart of government gave a telling insight into the Coalition's economic strategy. Big business, ministers believed, would drive a handsome recovery. Small businesses were not even on their radar. The bosses of the 50 biggest companies were assigned ministerial buddies to give them a hotline to discuss their concerns, explained Davis. "Where is the hotline for small business leaders?" he asked.

There wasn't one then and there isn't one now. Put simply, the concerns of the little man and woman have repeatedly fallen on deaf ears. The louder small business shouts for help, the tougher it gets out there at the coalface, the tighter ministers clasp their hands to their ears and cheerily shout back, 'can't hear you'!

Take business rates, for example. This issue comes up in my surgery time and time again, as I speak to small businesses that are effectively being taxed off the high street. This tax has long ceased to be fair, has no connection to a business's ability to pay and has completely lost touch with property values.

While ministers like Vince Cable have publicly recognised that it's an outdated tax that needs reform, Tories like George Osborne, Eric Pickles and Brandon Lewis refuse to listen to sensible advice and only look at how much more money this tax can squeeze out of struggling businesses. Last year they introduced the biggest rise in business rates in 20 years. At a time when the economy was struggling to emerge from recession, can anyone say this was really the right medicine? Only the other week on the national news a small business owner from my constituency was shown to be paying almost double his rent in business rates. As he sadly told the interviewer that this crippling tax was causing him to close, right on cue, up popped the minister with responsibility for high streets, Mark Prisk. Managing to keep a straight face and without any shame or embarrassment, he said that business rates were fair and fit for purpose.

The fact that some 17,000 independents shut their shops last year probably escaped the Tory leadership. They were too busy concentrating on their next wheeze; to postpone a much-needed revaluation that would have realigned business rates with property values. By doing this, the Government ensured that rates would remain pegged to 2008 levels, near the height of the property boom, to 2017. With commercial property prices in places like Rochdale having subsequently fallen by up to 40 per cent, this only added to the unfairness.

I've yet to meet anyone who supported this policy. The British Property Federation described it as a move that "embeds injustices in the current system". They are right. It's made a bad system even worse.

Yet while the clamour for reform grows louder every day, the Tories continue to bury their heads in the sand. Mary Portas, who was tasked by ministers with conducting an independent review of the high street, said it was "bloody mad" that ministers had cancelled the revaluation. "Ridiculous" rates were preventing new businesses from opening, she argued. Ministers pushed their heads deeper in the sand and ignored her. Eric Pickles decided the way to save the high street was to get people parking on double yellow lines.

So where is Labour then against this backdrop of farcical high street policy that continues to kick small businesses in the teeth and make sure they're not part of any real recovery?

On Tuesday, Ed Miliband stood up at Labour conference and announced that a future Labour Government would cut business rates for small businesses in 2015 and then freeze them for another year. It's fully costed and after years of painful rises, this is the first time small businesses are being offered any respite. Labour understands that the people who go out and work long, hard hours to build up a business and create wealth and value to communities are not simply Treasury cash cows. They need help and support.

The Tories have long forgotten this. And that's why in one speech Ed Miliband has pledged to do more for small business than this Government has in three years. There's still a long way to go to create a fairer tax system and help small businesses grow, but Labour has made it very clear that small business will not be shut out of the recovery, they'll be at the heart of it.