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9 August 2018updated 09 Sep 2021 3:14pm

Labour is now the true party of business

Eight years of austerity has hurt public services but the private sector is feeling the pain too. In government, Labour will be pro-business and pro-worker.

By Bill Esterson

Given the opportunity to grade the government, many businesses would be tempted to follow the lead of the former foreign secretary and award the Conservatives an F.  

The CBI said government Brexit policy suffers from a “lack of clarity”. The EEF has said the government’s customs plan is “naïve” and “unrealistic”, while the Manufacturing Trade Remedies Alliance of businesses and unions said the government’s trade remedies plan lacked “sufficient detail”.

Businesses need stability and certainty to plan for growth, bring investment and jobs to communities and support the national economy. That’s simply not happening while the Conservatives cannot agree their strategy for negotiating Brexit. It also can’t happen without vital infrastructure or the development of the skills we need.

Ask those trying to get to work by Northern Rail whether they trust the government with business policy. Making the trains run on time and to destinations where people need to go to work are essential requirements in creating the conditions for a successful economy, yet such basic pro-business policies are apparently simply beyond the current government’s abilities.

Eight years of austerity have hurt workers and public services, but employers in the private sector are, too, feeling the pain. Less money means less spending, which hurts local economies and high streets.

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Not only have the government created a country where too many businesses struggle due to our poor economic performance, but they have presided over uncertainty in traditional sectors. The retail sector faces the loss of 900,000 jobs by 2025 and yet all the government offers is words rather than meaningful reforms.

They have also failed to support 30,000 suppliers who lost money in the Carillion fiasco. Damagingly, they failed to even enforce their own rules for payment. The government can no longer claim to be on the side of businesses when small businesses are owed £14.9bn in late payments, as figures from the Federation of Small Business suggest.

Our future as a country must come from creating the conditions where responsible businesses can thrive. This can come from investment in new technology and support in sectors where there are excellent opportunities, renewable energy for example. This government’s undermining of renewables was again highlighted in its failure to support the Swansea Bay Tidal Lagoon.

Recently, I met with local businesses in Westhoughton, near Bolton, who told me their priorities; that government should ensure the transport system can move people around quickly and cheaply; that the planning and licensing system should be simple to use; that the conditions should be created so that businesses can do what they are good at in order to to create jobs and boost prosperity.

Businesses want to do these things, but the government must create an environment in which they can succeed. That means overhauling our outdated business rates system and ensuring taxes are fair, not having the outrageous situation where high street retailers pay 20 times what Amazon does in tax. The Conservative life peer Lord Wolfson, head of Next, last month called for a radical rethink of business rates to adapt to the new realities facing the high street – another figure joining the calls of the British Retail Consortium and the EEF for an urgent rethink.

Our agenda will always be pro-worker. But it is also pro-business. We work with every business organisation there is: the CBI, the IOD, the FSB and the EEF. The IMF and OECD both say that high-wage economies are more successful and better for business. The British Academy has found that the short-termism of the stock market is counter-productive.

It holds back the potential to do good in the world. Some businesses do good now despite the constraints of financial reporting. Fujitsu, for instance, see benefits from taking a longer term view and have won awards for doing so. But too many other businesses are constrained by the short-termism of financial reporting and do not act as if they are interested in the public good or in the future of the planet.

Change is coming as the Tories abandon their position as the party of business. This summer, I am listening to businesses large and small around the country, putting forward their hopes for a future Labour government. Every conversation I have had with business leaders has been positive, an indication that the business community recognises that we are on the path to power and seeking to work with rather than against Britain’s business community. And Labour in local government is already a strong partner delivering the support needed, as I found when I met manufacturing and retail businesses in East Lancashire.

And that’s what Labour will do in government. We’ll be the partner that businesses need.

We’ll invest in rail and busses too, promoting free Wi-Fi on public transport and building on the excellent work being done by Labour councils to bring Wi-Fi to city centres. We’ll ensure we have the 30MBps broadband business needs, not the feeble 10 MBps promised by this government.

We’ll listen to organisations like the CBI, who have criticised the government’s apprenticeship policy and make sure that high quality apprenticeships run through the supply chain. We’ll make sure that businesses are paid promptly as part of government contracts and that project bank accounts protect supplier money in the event of the insolvency of a main contractor.

We’ll set up a National Transformation Fund and a network of Regional Banks, listening to calls from the FSB to put more competition into the business credit market. Businesses will be able to access the finance needed to start and grow especially where they fit with our missions of tackling climate change and embracing new technology – to the benefit of the many not the few. We agree with the CBI, that an industrial strategy must benefit all the regions and nations of Britain, and that it must promote a long term strategic outlook.

We’ll work with those businesses who want to act in a responsible way. And we’ll encourage those firms who pay a living wage and who deliver opportunities regardless of gender, ethnicity, disability or age.

The hostility seen from Conservative ministers towards businesses leaves a void Labour can fill. The Conservatives’ recklessness and our exciting plans mean we have a real opportunity to go much further. So while the business community may not be signed up to the Labour Party just yet, they are beginning to realise that Labour may just be for the many businesses as increasingly the Conservatives are just for the few.

Bill Esterson is Labour’s Shadow Minister for Business and International Trade

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