Why small businesses must be at the centre of Labour's economic strategy

By promoting balanced growth and increasing employment, small businesses exemplify the investment economy Labour wishes to build.

At the recent Progress conference, Ed Miliband gave a speech in which he talked about the need to establish a new political and ideological consensus, different to that of the post-Thatcherite settlement we live in now. But it was in the subsequent Q&A that one of the most interesting points was raised. "Small businesses," Miliband said, "should be a natural constituency for Labour". It is an area of policy and a section of society largely ignored by the party’s dialogue, but it shouldn’t be.

Small businesses represent many of Labour’s economic philosophies: connection with communities, accountability and high-quality work. For a "One Nation" party, with all of its Blue Labour flavourings, the idea of a connection between community and business is has obvious attractions. By employing locals and contributing to regional growth, small businesses exemplify the investment economy Labour aspires to build. 

Those who wish to demonise the British left have long depicted Labour as anti-capitalist, anti-business and narrowly pro-union. As always, the words of Tony Crosland are a great help here. Crosland argued that post-war capitalism is not the impossible framework for pursuing equality that Marxism believes it to be – the Labour Party is fundamentally a parliamentary socialist party, not a revolutionary one. If the 20th century Labour governments taught us nothing else, it is that Labour wants to harness capitalism to achieve greater equality; the minimum wage from New Labour, the technological investment of the Wilson years and the Attlee government's welfare state, are all examples of how the party has sought to curb the destructive tendencies of the modern western economy. If nothing else, this is the pursuit of 2012’s political buzzword, 'responsible capitalism', a progressive agenda within the contemporary socio-economic framework.

Politically and economically, Labour is an anti-monopolistic party. It makes perfect sense for it to support small businesses in the face of large nameless multinational corporations. One of the guiding principles is that of accountability, for which Tony Benn’s five questions of power are always relevant: what power have you got? Where did you get it from? In whose interests do you use it? To whom are you accountable? How do we get rid of you? These questions are far more easily answered when asked to a small business than a large multinational; an issue never more relevant than at the moment with the tax-dodging antics of Google and Amazon.

Labour has made its objective clear; to get people into good work and to get the economy moving, both of which are staples of the German business model much feted by the left. This attitude has been personified by the reinstatement of the Small Business taskforce and its resultant policy review report, putting businesses back at the centre of the push for growth and greater economic diverity. The 2008 crash and subsequent recession demonstrated the overdependence of the UK on the City and its lack of economic variation. Businesses, both small and medium-sized, will go some way to addressing this and toward meeting the challenges of regional struggles during austerity, injecting growth back into deeply affected areas such as the north east. The Labour Party is a progressive political force and small businesses should be, and are, a key part of its programme for a better economy. 

Dan Holden is deputy editor of Shifting Grounds

Shadow business secretary Chuka Umunna speaks at last year's Labour conference in Manchester. Photograph: Getty Images.

Dan Holden is deputy editor of Shifting Grounds

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.