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It's not you, it's SME!
by The Editor at 12:18 11/04/05 (Viewpoint)
Philip Ross, founder of the Labour Small Business Forum and member of Shout99 network, argues why Labour must not lose sight of the electoral importance of small and medium sized businesses.
Philip Ross writes:

Philip Ross at Labour Party Conference
When out canvassing in 1992, Tony Blair was told by a man cleaning his Sierra that he had always voted Labour in the past, but now he had started his own business he was going to vote Conservative. Blair said afterwards that that was the point at which he realised the election was lost. If Labour wasn't reaching out to such people then they were doomed to fail.

Now more than ten years on with an increasing army of small businesses and freelance workers, how much have things changed? Has Labour become the party of small business? And how important is the small business vote?

As many MPs have realised small business is a key constituent in our community. It is estimated that around ten per cent of the population work for themselves and in the future that people won't just change jobs and careers, but we will all experience a period of self-employment.

Knowledge-based economy
As many MPs have realised, small business is a key constituent in our community. But this constituency is changing. It includes not just the traditional array of tradesman, small firms making and selling items in our high street and in the industrial estates, but also an army of professional freelance workers working in the knowledge-based economy in areas such as IT, engineering and the creative industries including the media.

The knowledge-based economy in IT and the creative industries are driven by armies of freelance workers. These workers are often engaged on short term contracts for work on projects and to bring in expertise. If this is the employment and work pattern for the 21st century Labour needs to understand the needs and aspirations of these workers.

The Tories think it is all about tax, Labour often confuses freelance workers as temporary workers, the answer is somewhere in between. It is vitally important that a clear distinction can be made between freelance workers and temporary workers for both tax and employment rights. But whether working freelance or running or working in a small firm, small business is important. Our prosperity depends on its success.

Importance of small business vote
MPs themselves certainly consider it to be important. Kerry Pollard, the Labour MP for St Albans who is the chair of the All Party Parliamentary Small Business Group and previously ran a small business himself, believes it is very important. Indeed in the run up to the 2001 general election he was contacted by countless numbers of MPs from all parties, who, realising the importance of the small business vote, asked him if they were a member of the group and if not could they join. As a consequence it is the largest of all the all party parliamentary groups. Indeed in the new parliament following the last election more MPs gave their maiden speeches in a small business debate than in any other.

The traditional view was, of course, that the Conservatives were the party of capital and Labour the party of the workers. In the early 1990s at one of the first Labour party meetings I ever attended the selection process was underway to select a councillor for a safe Labour seat.

One of the candidates stood up and spoke and explained that while he was a postman, he also run the local fish and chip shop. He said, 'people say to me how can you be in the Labour party and also run your own business?' To a lot of tutting, he said, 'well I say that my children have got to eat'. It didn't go down very well and he got zero votes.

Support for small business
Things have changed since a network of Labour party members came together to form the Labour Small Business Forum in 2002. It has attracted Labour party members from the Orkney Islands down to the tip of Cornwall and has run its own policy forums on small business issues and holds its own fringe meetings at the Labour conference. Labour now has a claim to be the party of small businesses. Indeed Gordon Brown at the 2003 Labour Conference declared : "Let our party be the pro-enterprise as well as the pro-fairness party: Labour, the party of small businesses and the self employed in Britain just as much as we have always been and are the party of employees."

Indeed measures introduced by Labour have gone a long way to supporting small business. For instance small businesses are now allowed to charge interest on late debts. The VAT system has been simplified for retailers and the new Enterprise Bill was passed, which among other things makes it easier for people to set up in business, and it does that in part by reducing the penalties which accrue to those who go bankrupt in business through no great fault of their own. There is support of a whole range of services for small firms through BusinessLink and the Small Business Service, which the apparently pro-business Tories plan to scrap.

The challenge
The challenge for a future Labour government is to recognise that to be in business you don't have to make things or sell things but that you can just sell your own skills and knowledge as a freelancer.

It needs to understand that freelancers and temporary workers are not the same thing and that freelancing is a career decision and not a stop gap between permanent jobs.

It needs to recognise that not every small business wants to expand but needs support to survive. Regulation and egislation needs to include measures to mitigate the effect and demands on small business. Ask any small businessman what changes they would like the government to make and they would say bring in legislation to force firms (usually larger firms) to pay their debts on time.

If Tony Blair was to encounter the man washing his Sierra today, he might find him quite at home voting for Labour. After all, a stable economy is the most important platform for any business to grow. However Labour and indeed all the parties need to take a modern view of our business economy. The employment market isn't as it was ten years ago for Sierra man.

More people then ever before are now working as freelancers or running small businesses and they are key to our future prosperity. Government needs to think about how new regulations will benefit, harm or bypass freelancers, temporary workers and small firms. To do so they need to understand how all these modes of work operate, because todays Mondeo man does and will vote accordingly.


Philip Ross
Philip Ross is the founder of the Labour Small Business Forum, a network of Labour party members who work for themselves. A former IT freelancer, Philip has campaigned actively on behalf of freelancers and small businesses. At Labour Party Conferences, he has chaired fringe meetings and spoke from the platform in support of clearer and fairer policies for small businesses.

Philip led the team which successfully campaigned to have IT skills removed from the Skill Shortage list.

If you wish to comment on this article, please log in and use the Reply button below. Registering is simple and easy to do online - see 'Join Shout99'.
The Editor Shout99.com 2005

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It's not you, it's SME! The Editor - 11/04
    Re: It's not you, it's SME! snodgrasse - 11/04
    Re: It's not you, it's SME! New Dawn - 11/04
    Re: It's not you, it's SME! Dualnet - 11/04
    Re: It's not you, it's SME! Gnashmills - 11/04
    Re: It's not you, it's SME! PHolley - 12/04
    Can you help? brianc - 12/04
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    Thanks for the article, but... richard-s - 13/04
       Re: Thanks for the article, bu... brianc - 14/04
       Re: Thanks for the article, bu... JonnyComeLately - 14/04
       agreed jojo - 14/04
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