This is a guest post from Jan Burnell - a successful small business owner. I asked her to think about what Labour’s offer could and should be to small companies and their owners. Here’s what she came back with:
I’ve been asked to contribute to Scarlet Standard as the owner and founder of The Centre, a small but successful training company, now 16 years old. We really are small – six paid staff, including me, and a turnover of less than a million. We’re about as far from Standard Chartered bank as it’s possible to be.
And yet, my business is, I believe, typical of hundreds of thousands of firms up and down the country, many of them run by Labour supporters. In 2009, SMEs together ( enterprises with less than 250 staff) accounted for 99.9% of all enterprises, 59% of private sector employment and 49% of private sector turnover. Within this larger group there were over 4.5 million businesses with no, or less than 10 employees. So this is a sizeable interest group, one Labour cannot afford to ignore.
It’s got easier to start your own business in the last twenty years or so. Banks were willing to loan and a very large number of people started their own business with a redundancy or early retirement lump sum. The kind of people who did this don’t fit into a homogenous group. Many of them are Tories and feel a kindred spirit with big business. But many retain the ethics and values of the public sector from which they came or of the Trade Union that was their protection while they were in employment. Many of them, enough to win several marginals, are Labour.
What do Labour small business owners want? I believe that principally, we want to feel that someone knows we exist. We want to feel part of the discourse, a voice that matters, that must be listened to. This means specific policy issues as well as using the right rhetoric. Every political leader nowadays nods in the direction of small business but most restrict their policy approach to deregulation. Small business owners who are Labour don’t want to cheat or bully their staff. They don’t want to sack people without notice or reason, or to avoid employing women in case they get pregnant, or to cheat the revenue or the VAT.
They do want less paperwork and government tender documents are a key issue here. I long ago gave up responding to invitations to tender, knowing that they would take me days to complete when in all likelihood the successful company was already lined up and the process was a nod in the direction of fairness rather than a transparent competition to find good value. This government has talked about making tendering easier for small firms – I’m yet to see how.
Small companies want access to more money. Every business wants this. But small businesses are often hampered by their lack of collateral when applying for loans. What that means in practice is that you have to put your house up (if you’re lucky enough to own one). I don’t feel comfortable putting my husband’s dwelling place on the line for my business and I don’t feel I should have to. A Government backed scheme which guaranteed small business bank loans without needing to take housing assets into account would be a real boon for many.
Such loans should not be limited to new developments or innovation. It’s when the going is tough that you really need a helping hand and that’s precisely when getting a loan is really difficult. Clearly, there needs to be a viable plan to see the business through but there’s a difference between going through a bad patch and going bust, and a helping hand financially can be just what makes that difference.
In terms of ‘red tape’, I don’t believe small businesses want a complete absence of regulation. What they do need, especially very small businesses like mine, is some help with the costs of fairness. It’s right that long standing employees should get reasonable compensation for redundancy but if you’re losing the job to save money, it’s clearly difficult to find these kinds of payments. Similarly with maternity pay. I fought my whole adult life for women’s equality at work. It’s still difficult to find another wage on top of the six I’m paying now out of my slender profit margin. A government-backed insurance scheme which enabled businesses to protect themselves against these kind of risks would be a real help.
Above all, what small businesses need is a thriving economy where the public has enough money to go out and buy our goods and to pay the taxes that support our services. The Coalition government has presided over some of the worst years since I’ve been in business, killing confidence, cutting support to my public sector clients and presiding over the worst recession since the thirties. A properly managed economy where the welfare of everyone is guaranteed through fair contributions from everyone is what would help small businesses thrive. It wouldn’t be so bad for everyone else, either.