How Labour councils are backing small businesses

The party's councillors are demonstrating the results that an active government strategy can achieve for business, jobs and growth.

While the Labour Party is out of office nationally, there is still much we can do to support Britain’s small businesses, and we take this responsibility very seriously.

Across the country, Labour councils and councillors are often the first point of access for small businesses seeking support. There are nearly 650,000 businesses active in areas covered by Labour authorities and this figure is set to grow as we seek to win control of more councils this May.

Small businesses are the lifeblood of our economy, with nearly 90 per cent of people moving from unemployment into employment doing so through a small business. If we help these businesses to survive and thrive we will be taking a huge step towards tackling the unemployment crises as well.

In his first conference speech as leader, Ed Miliband expressed his determination for Labour to become the party of small business for just these reasons. We want to see more people setting up and working in business and believe that they reflect our values as the engines of social mobility and challengers of the status quo.

Labour councils across the country are playing a huge role in demonstrating how the next One Nation Labour government will champion and support small businesses and encourage growth in every area.

This is why I have recently published a report - Labour Councils: Backing Business - showcasing some of this excellent and innovative work. The report was produced in association with the Labour Group on the Local Government Association and features a report from every region of England and Wales, including ones by unitary, district and second tier authorities. This builds on last year’s launch of the Labour Councillors Business Network – bringing together Labour councillors from across the country to share ideas, disseminate best practice and develop new thinking.

Nationally, Labour are looking at how government can use procurement smartly to deliver for British business. When one in every seven pounds of GDP is spent by government it is the largest lever we can pull to support UK firms. The report demonstrates how Labour councils are already pulling this lever locally.

Vale of Glamorgan and Merthyr Tydfil Councils describe how they have developed a smartphone app to alert local small businesses to new tenders and explain the process to them and City of Manchester Council explain how they have re-written their tender guidelines to boost local jobs and businesses and developed a website portal for local businesses to use.

Small businesses often tell me that it is hard to find young people with the skills they need and the Labour Small Business Taskforce is looking at how we can equip people leaving education with these skills. These examples show how constructive partnerships between local authorities and businesses can help to deliver this.

Reading Council describe how they secured funding from the O2 Future Fund to develop a "one-stop shop" smart phone app and related social media tools to match the right young people with the right businesses. Stoke-on-Trent’s JET scheme is also highlighted. This connects businesses and unemployed people and continues to support both parties once they have been placed together. Plymouth Council also describe the success of their 1000 Club which encouraged 1,000 local companies to employ a local young person each. Partnership between councils and business can also have many other positive results.

Durham County Council describes how it persuaded Hitachi, a large local employer, to incorporate local small businesses into the local supply chain. Kirklees Council sets out its Innovation Voucher Scheme which offers local businesses grants to improve their efficiency and has lead to rapid growth amongst local firms and the highest rate of private-sector job creation in the West Midlands. The London Borough of Merton reports on how it secured funding from a new major supermarket arriving in the area for shop improvement grants for smaller neighbouring shops.

The report also highlights the importance of having a clear vision and brand to attract inward investment, with Stevenage Borough Council describing how their inward investment campaign “Where Imagination Takes Hold” reached a television audience of six million people. Nottingham City Council also describes how it established an effective cluster of businesses in the new technology sector, called the “Creative Quarter”. This is now a rapidly growing small business hub.

These reports, along with further short contributions from over twenty other Labour councils in the pamphlet, are fantastic evidence of the results that an active government strategy can achieve for business, jobs and growth. They represent a gold mine of ideas for other councils across the country and will also help Labour groups seeking to win office to develop strong manifestos with sound business policies.

Toby Perkins is Labour MP for Chesterfield and shadow minister for small business

Toby Perkins is Labour MP for Chesterfield and shadow minister for small business

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How tribunal fees silenced low-paid workers: “it was more than I earned in a month”

The government was forced to scrap them after losing a Supreme Court case.

How much of a barrier were employment tribunal fees to low-paid workers? Ask Elaine Janes. “Bringing up six children, I didn’t have £20 spare. Every penny was spent on my children – £250 to me would have been a lot of money. My priorities would have been keeping a roof over my head.”

That fee – £250 – is what the government has been charging a woman who wants to challenge their employer, as Janes did, to pay them the same as men of a similar skills category. As for the £950 to pay for the actual hearing? “That’s probably more than I earned a month.”

Janes did go to a tribunal, but only because she was supported by Unison, her trade union. She has won her claim, although the final compensation is still being worked out. But it’s not just about the money. “It’s about justice, really,” she says. “I think everybody should be paid equally. I don’t see why a man who is doing the equivalent job to what I was doing should earn two to three times more than I was.” She believes that by setting a fee of £950, the government “wouldn’t have even begun to understand” how much it disempowered low-paid workers.

She has a point. The Taylor Review on working practices noted the sharp decline in tribunal cases after fees were introduced in 2013, and that the claimant could pay £1,200 upfront in fees, only to have their case dismissed on a technical point of their employment status. “We believe that this is unfair,” the report said. It added: "There can be no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought."

Now, the government has been forced to concede. On Wednesday, the Supreme Court ruled in favour of Unison’s argument that the government acted unlawfully in introducing the fees. The judges said fees were set so high, they had “a deterrent effect upon discrimination claims” and put off more genuine cases than the flimsy claims the government was trying to deter.

Shortly after the judgement, the Ministry of Justice said it would stop charging employment tribunal fees immediately and refund those who had paid. This bill could amount to £27m, according to Unison estimates. 

As for Janes, she hopes low-paid workers will feel more confident to challenge unfair work practices. “For people in the future it is good news,” she says. “It gives everybody the chance to make that claim.” 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.