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

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Tony Blair might be a toxic figure - but his influence endures

Politicians at home and abroad are borrowing from the former prime minister's playbook. 

On 24 May at Methodist Central Hall, Westminster, a short distance from where he once governed, Tony Blair resurfaced for a public discussion. Having arrived on an overnight flight, he looked drawn and puffy-eyed but soon warmed to his theme: a robust defence of liberal globalisation. He admitted, however, to bafflement at recent events in the world. "I thought I was pretty good at politics. But I look at politics today and I’m not sure I understand it."

Blair lost power in the summer of 2007. In the ensuing nine years, he lost reputation. His business ventures and alliances with autocrats have made him a pariah among both the public and his party. A YouGov poll published last year found that 61 per cent of voters regarded Blair as an electoral liability, while just 14 per cent viewed him as an asset. In contrast, John Major, whom he defeated by a landslide in 1997, had a neutral net rating of zero. It is ever harder to recall that Blair won not one general election (he is the only living Labour leader to have done so) but three.

His standing is likely to diminish further when the Iraq inquiry report is published on 6 July. Advance leaks to the Sunday Times suggest that he will be censured for allegedly guaranteeing British military support to the US a year before the invasion. Few minds on either side will be changed by the 2.6 million-word document. Yet its publication will help enshrine Iraq as the defining feature of a legacy that also includes the minimum wage, tax credits, Sure Start, devolution and civil partnerships.

Former leaders can ordinarily rely on their parties to act as a last line of defence. In Blair’s case, however, much of the greatest opprobrium comes from his own side. Jeremy Corbyn inclines to the view that Iraq was not merely a blunder but a crime. In last year’s Labour leadership election, Liz Kendall, the most Blair-esque candidate, was rewarded with 4.5 per cent of the vote. The former prime minister’s imprimatur has become the political equivalent of the black spot.

Yet outside of the Labour leadership, Blairism endures in notable and often surprising forms. Sadiq Khan won the party’s London mayoral selection by running to the left of Tessa Jowell, one of Tony Blair’s closest allies. But his successful campaign against Zac Goldsmith drew lessons from Blair’s election triumphs. Khan relentlessly presented himself as “pro-business” and reached out beyond Labour’s core vote. After his victory, he was liberated to use the B-word, contrasting what “Tony Blair did [in opposition]” with Corbyn’s approach.

In their defence of the UK’s EU membership, David Cameron and George Osborne have deployed arguments once advanced by New Labour. The strategically minded Chancellor has forged an unlikely friendship with his former nemesis Peter Mandelson. In the domestic sphere, through equal marriage, the National Living Wage and the 0.7 per cent overseas aid target, the Conservatives have built on, rather than dismantled, significant Labour achievements."They just swallowed the entire manual," Mandelson declared at a recent King’s College seminar. "They didn’t just read the executive summary, they are following the whole thing to the letter."

Among SNP supporters, "Blairite" is the pejorative of choice. But the parallels between their party and New Labour are more suggestive than they would wish. Like Blair, Alex Salmond and Nicola Sturgeon have avoided income tax rises in order to retain the support of middle-class Scottish conservatives. In a speech last August on education, Sturgeon echoed the Blairite mantra that "what matters is what works".

Beyond British shores, political leaders are similarly inspired by Blair – and less reticent about acknowledging as much. Matteo Renzi, the 41-year-old centre-left Italian prime minister, is a long-standing admirer. "I adore one of his sayings,” he remarked in 2013. “I love all the traditions of my party, except one: that of losing elections."

In France, the reform-minded prime minister, Manuel Valls, and the minister of economy, Emmanuel Macron, are also self-described Blairites. Macron, who in April launched his own political movement, En Marche!, will shortly decide whether to challenge for the presidency next year. When he was compared to Blair by the TV presenter Andrew Marr, his response reflected the former prime minister’s diminished domestic reputation: “I don’t know if, in your mouth, that is a promise or a threat.”

The continuing attraction of Blair’s “third way” to European politicians reflects the failure of the project’s social-democratic critics to construct an alternative. Those who have sought to do so have struggled both in office (François Hollande) and out of it (Ed Miliband). The left is increasingly polarised between reformers and radicals (Corbyn, Syriza, Podemos), with those in between straining for relevance.

Despite his long absences from Britain, Blair’s friends say that he remains immersed in the intricacies of Labour politics. He has privately warned MPs that any attempt to keep Corbyn off the ballot in the event of a leadership challenge would be overruled by the National Executive Committee. At Methodist Central Hall, he said of Corbyn’s supporters: “It’s clear they can take over a political party. What’s not clear to me is whether they can take over a country.”

It was Blair’s insufficient devotion to the former task that enabled the revival of the left. As Alastair Campbell recently acknowledged: “We failed to develop talent, failed to cement organisational and cultural change in the party and failed to secure our legacy.” Rather than effecting a permanent realignment, as the right of the party hoped and the left feared, New Labour failed to outlive its creators.

It instead endures in a fragmented form as politicians at home and abroad co-opt its defining features: its pro-business pragmatism, its big-tent electoralism, its presentational nous. Some of Corbyn’s ­allies privately fear that Labour will one day re-embrace Blairism. But its new adherents would never dare to use that name.

George Eaton is political editor of the New Statesman.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad