Interview: Chuka Umunna and Toby Perkins make a Labour Party pitch for the votes of business leaders

Away from Europe, Labour has plans to raise the minimum wage to more than £8 an hour by 2019, push UK overseas territories to be put on an international blacklist if they refuse to cooperate with a drive against tax avoidance, and establish an apprenticeship for every school leaver who makes certain grades.

When we quiz Umunna on the British Business Bank, established by the coalition government under the watch of business secretary Vince Cable, he says Labour’s approach will not be to tear up what has been done before – rather expand and improve.

He wants to scale up what has been started with the British Business Bank by injecting new capital, alongside bolstering what has gone on with the Green Investment Bank.

Building on the British Business Bank will see the creation of a British Investment Bank – backing a network of regional banks with a purpose of supporting small business growth in particular areas.

“We want to see more competition in the market, with more challenger banks like Aldermore and Handelsbanken. Lending to £5m businesses is dominated by four banks.”

On late payment, he said: “We will require large companies, when they make their VAT return on a quarterly basis, to declare if they have paid suppliers on time. If they haven’t, each will have to pay interest to those suppliers.”

Business rate bonanza

One of the core components to Labour’s message for business owners is its commitment to re-think the way the business rates system is carried out, and make sure bigger companies are paying a bigger share.

The party would not continue with the recent reduction, to 20 per cent, of corporation tax. All of the money saved by bringing that back up a percentage point would be spent on a business rate reduction for every business with a rateable value of under £50,000. Perkins predicts that about 1.5m companies would see a reduction in the first year and a freeze in the second when it comes to a business rates bill, averaging out as a saving of around £450 per annum.

For those above the £50,000 rateable value, Perkins brings up the point that, at 21 per cent, the UK will still have the lowest rate of corporation tax in the EU. “We won’t want to be a high tax country at all, but continually focusing on corporation tax, at a time when you have huge numbers of empty units on high streets and companies saying that business rates will take them under, is wrong.”

He pointed to the Conservative and Liberal Democrat coalition as a government offering a one year discount, while the residual rate goes up.

Read more from our General election 2015 focus:

Another hot topic during the last year, and in the approach to the general election, has been the perceived skills gap the UK has. That, combined with the lowest productivity rate in the G7 barring Japan, has let to worries that Britain will not be able to continue with its proven recovery.

Umunna believes that investment in skills and innovation has a big impact on productivity. The MP cites not enough vocational training, in areas such as STEM, as part of the issue. “That is why we need pathways to higher level skills. We’ll boost apprenticeships, they will be level three and above and lasting for two or more years,” he explained.

“We agree with the uprating of the apprenticeship minimum wage, but need to go further in terms of the main rate. Labour is committed to getting it to £8 over the next parliament, and put in place tax incentives to help businesses pay the Living Wage.”

Umunna closes our interview by saying that Labour is all about “creating jobs”. It wants to do this by reduction the burden on business leaders, freeing up capital to invest in jobs to support expansion – both within the UK and beyond.

While Labour has had to sit back, in a shadow government capacity, as the coalition oversaw encouraging growth in the economy since the financial crisis, both Perkins and Umunna believe the party has something more to offer. 

There is no doubt that its offering is more firmly aimed at the smaller business end of the scale, supporting those that are in the early days of growth and often find it hard to make ends meet at the end of the month. However, in an era where new company formation is growing year after year, there will be a considerable amount of entrepreneurs in need of these policies.

As Perkins put it: “Since Ed Miliband said he wanted to make the Labour party the party of small business back in 2010, there has been very healthy competition over the votes of smaller companies. All parties recognise, certainly in rhetoric terms, how important they are.”

Share this story

Send this to a friend