We’re getting serious on enterprise

By Luke Bozier

I wrote in March, in an article for LabourList, that Labour had “in effect become the party of the public sector”, in response to Ed Miliband’s speech to the TUC rally in Hyde Park.

Soon after, Alex Smith & I met to discuss our concerns on the party’s declining credibility; in our own ways, both socially and commercial, we are entrepreneurs, and it was – and still is – pretty clear that Labour has lost its voice on enterprise. That’s not a luxury we can afford; the future economy, which we are already entering – post-recession, post-credit crunch, post-crisis – is an economy which will be built more than ever on the back of entrepreneurs, self-employed people, micro-enterprises, social enterprises and other independent economic actors.

The “means of production”, in the old language of socialism, is now in the hands of every individual with a computer. Instead of being afraid of enterprise, and recoiling away from the opportunities it presents to create a fairer society with more opportunity for all, Labour under Ed Miliband must embrace enterprise and put it at the heart of everything we do as a party.

Nobody in politics seems to know how to fix the economy. The Tory-Lib Dem government is scrambling around trying to appear as though they are boosting it. Miraculously, in an era with very little money in the public coffers, the treasury seems to be able to find a billion here or a billion there to support half-baked pro-growth policies. The Tories’ only answer for boosting enterprise seems to be cutting taxes and red-tape, both of which are valid on their own merits, but they don’t go far enough in supporting people into entrepreneurship.

The public sector will bring the nation to a halt on Wednesday with its mass walk-out. For historic and contemporary reasons, we are associated with those strikes. If you ask the average business person whether Labour is on their side or not, they’re unlikely to give you a resounding “yes”. Ed Miliband put the producer/predator contrast at the heart of his conference speech this year; a valid intellectual point perhaps, but one which resulted in the party being seen, fairly or unfairly, as anti-business. Miliband meets with businessmen and women regularly – but we’ve heard from some of those people that their gatherings can be underwhelming or feel perfunctory. From the leader’s office to the local Labour club, then, we are not currently the party of the entrepreneur.

So if none of the three major political parties are the party of enterprise, the question has to be asked: who will speak up for Britain’s entrepreneurs, aspiring and existing?

The idea that Labour can’t be the party of enterprise is wrong. Capitalism isn’t all bad. In fact, in our highly regulated environment, most capitalism isn’t bad. Enterprise isn’t about the bad bankers who innovated their way to destruction via dodgy new asset classes based on bad debts. It’s about the shop-keepers, web designers, consultancy companies, importers and exporters, the local gardening company and the many millions of other small businesses that are the lifeblood of our economy.

Without those small businesses, there is no economy. Indeed to go further, enterprise gives people the means to control their own economic destinies and futures – surely that fits with Labour’s ethos of creating a fairer society with more opportunity for everyone? We think it does and that’s why Labour’s business is being published.

Labour’s business brings together 22 people with experience in business, both as entrepreneurs and policy-makers. The pamphlet is a collection of analyses and policy ideas, which taken together show how Labour can in fact be the party of enterprise. There’s no reason why the Tories should take that mantle, but we need to be actively committed to enterprise in order to gain credibility on it. Labour’s business seeks to contribute something meaningful to get that process started.

Things are starting to change for Labour. Since that TUC rally in March, Ed Miliband has slowly started to move closer to the centre ground, and we have realised as a party that until we’re seen as serious and leading the way on business and growth, we cannot win a general election. Chuka Umunna was promoted to shadow business secretary, a shrewd move by Ed M. It was wise to change the party rules in order to bring people like Umunna up more quickley. Chuka has a firm grasp of the business brief, and is serious about pushing Labour to be more comfortable with business.

I’ve been critical in the past, and I’m acutely aware that we have a lot of work to do to succeed as a party. But at this conjecture, with the economy in the mess that it is, the government in disarray over how to fix that mess and a public sector seemingly in crisis mode, there is a fantastic opportunity for Labour to frame what an enterprise-led exit from the doldrums might look like. If we get that right, we might be the party leading that recovery.

Luke Bozier is co-editor of Labour’s business.


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12 Responses to “We’re getting serious on enterprise”

  1. Nick says:

    But look at your attitude to the wealth creators. You’re rich, we are going to tax you until the pips squeak.

    When they do squeak the move overseas.

    Then the real Labour attitude comes out. F-off you tax avoiding scum. I’ve heard this repeatedly from the left when they are challenged on the matter.

    You also get the attitude, you’re rich, you pay for it when it comes to services. This even extends to the middle class over things like care for the elderly.

    You treat people as cash cows to be milked. People have had enough.

    The legacy of Labour is an economy where politicians view is that it has one purposes. To service government debts.

    The problem is there is not enough economical capacity to service the debts you’ve left.

    So we are going to get high taxes (your wish is fulfiled)

    We are going to get smaller government (the Tories wish is fulfiled)

    And the public gets shafted.

    Again notice the interesting part about your post. The question is, what is missing? What have you omitted.

    It’s this.

    How much debt does the government have? Pensions included. (7,000 bn – present value)

    How much forced spending does the government have? Bailing out those with no pensions? (12,000 bn – present value)

    What’s the tax revenue? 550 bn

    What’s core spending? 300 bn

    What does it cost to service the debts and force spending? (RPI linked, 5% pa)

    Is tax revenue enough?

    The answer is no.

    Hence there is no choice about massive cuts.

    The only choice governments have is is the default on the promises managed, or is it forced on the UK like Greece

  2. I entirely agree with the sentiments on business expressed in this article. What this country has needed for far too long is a culture whereby going into business is not regarded as something exceptional. At the moment, due to lack of business credit, enterprise is being increasingly concentrated in the hands of big corporations.

    I suggest a few matters that might hopefully come under scrutiny by the twenty members of Labour’s Business.

    1). Reinstate the 0% tax band for taxable profits of £10,000 or less.

    2). Reinstate marginal relief for taxable profits between £50K and £300K.

    3). Set a minimum threshold (e.g. 5 staff including the owner) before employer’s contribution to NI kicks in.

    4). Ruthlessly slash regulation for small businesses which at present goes a long way to make them uncompetitive – and I do mean ‘ruthlessly.’

    5). Act to encourage competitive alternative business banks to break the stranglehold in this sector held by the big four.

    Cash and credit drives enterprise, which is why the issue of new business banks is so important. It was British merchant banking that drove this country to world pre-emminence in manufacturing and trade. While we won’t repeat that through these and other measures in a global economy, we will all be a whole lot better off than if we don’t.

  3. Forlornehope says:

    Just read the comments on any Guardian article that talks about business and enterprise to see how far you have to go even to convince the Left that business is a necessary evil, let alone a good thing. I wish you luck.

  4. jack says:

    you should talk to Philip Ross who writes a column for Progress on small business

  5. swatantra says:

    Its good that at las Labours attitude to business and enterprise is changing.
    I’ve been saying that for years. Labour has always had an antipathy towards business and that has to stop.
    Certainly the Banks have to be more prepared to lend and especially to co-operative eneterprises.
    Its the SME that are the staple lifeblood of the country and we have to help them succeed.

  6. Henrik says:

    Some interesting thinking here, but ultimately doomed to futility. Labour is the party of dirigiste, centralised, socialised and utterly non-entrepreneurial activity. The core Labour Left hates enterprise and considers profit and the activities which produce it somehow evil. It’ll be a cold day in Hell before business (and a lot of folk who don’t work in the public sector) ever trust Labour on this again – Blairism was OK by many, hence why he, irritatingly for the comrades, won elections; Millibandism, not so much.

  7. Amber Star says:

    Is this ‘be a hopeless romantic’ week on Labour Uncut? Start a little business from your bedroom with nothing but a laptop & a mobile phone….?

    You know that businesses grow from government investment & protectionist measures. That’s how Japan, Taiwan, Singapore, China & Korea kick-started (or re-started) their productive economies. You don’t get to sell anything in Asia unless you have a manufacturing presence there.

    As soon as you give access to your markets without demanding local production as a condition, you have killed your economy. Not only does the UK not stipulate local production, we don’t even make the b*ggers pay UK corporation tax!

    Then we wonder why we’re screwed & hoping that people will save the economy by becoming self-employed, ‘outsourced workers’, all tapping away at laptops in their bedrooms. Good grief!
    😎

  8. Amber Star says:

    And to dispel the idea that I am being relentlessly negative: Get some bold policies to kick-start businesses. How about asking yourselves & really trying to figure out: What would it take for a Uk company to be the next Apple; & to design & manufacture its products here? Which barriers really stop it happening?

    It would mean setting aside the received wisdom that is so limiting. All the excuses will be trotted out: Uk workers are too expensive, don’t have the skills, don’t work hard enough, smart enough etc. None of which stands up to examination.

    The truth is: There is no will within government to make it happen because it means making hard decisions, deciding which types of business we want to thrive in this country, helping them get started, picking winners & killing-off the losers before they cost too much, regardless of the political consequences. And not letting the ones which don’t work out stop you from backing more ideas & picking more winners & closing out more losers until success breeds success & you are into a virtuous spiral.

    But Uk governments won’t even dare to dream it because it’s difficult & can’t be achieved within one parliament. But it could be amazing, if they did.
    😎

  9. oliver says:

    When I read articles about entrepreneur and small business start-ups – particularly in the context of ‘anyone with a laptop or a shed…’ – it’s staggering that one simple fact is avoided again and again: not everyone is cut out to be an entrepreneur. In the same way that, no matter how hard someone might try, they’ll never be a pro-athlete, pro-musician or be cut out to do physically demanding work etc.

    Small businesses are only the answer to specific questions. Not knocking small businesses at all, but small businesses can only do so much, particularly when people are talking about a global scale, and when you’re talking about global or at least international problems, then no matter how many bedroom start-ups are created (the vast majority of them going to the wall quickly) it’s not going to tackle the ‘bigger problems’.

    I find it baffling that people are being encouraged to become (small) shop-keepers. We live in a society where fantastically powerful large firms like Tesco, Asda, etc have basically got the retail economy sewn-up and smaller firms can no longer get a look-in, whether because of pricing cartels or dodgy site development deals.

    When it comes to web-based and IT stuff, haven’t we been here before in the late 1990s and early 2000s? Wasn’t there a rush to get people onto IT etc only to see a lot of the work get outsourced abroad? My nephew is currently at one of the largest universities in the country doing programming and he’s already realised that there’s a glut of people with his skills already. Before anyone wonders why he then went into this field if it’s already over-subscribed, the reason was similar to how the Job Centre are *still* herding people into admin and office-based skills (despite a cull of people with these skillsets in both the public and private sectors ).

    Also, no online business based in the West will ever genuinely compete against the likes of Amazon, Google, eBay, iTunes etc. now. These are firms/brands that are now too synonymous with what they do. This isn’t defeatist, it’s realistic.

    I agree with Amber Star. This government is fond of pointing towards the success of other countries (real or imagined) and seeking to emulate them, but they don’t seem to want to actually follow how they became successful. China wouldn’t be in the position it is now (good or bad) without massive government intervention. The Tories seemingly want to copy their success but only by standing back and wishing it were so.

  10. AnneJGP says:

    A lot of sense in the OP and the comments.

    It seems to me that we need a new style of entrepreneurship: one that sees a pool of unskilled workers as a resource to be tapped and put to good use, giving worthwhile work to such people in the process.

    It’s going to need people with the vision to see past the “automate to cut staff to cut costs” meme that we’ve lived with for decades, maybe centuries. It shouldn’t be impossible to make technology serve our society in all senses, rather than accepting the current devil’s bargain of letting technology lay waste our social fabric in exchange for the undoubted goodies it brings us.

  11. jd says:

    “If you ask the average business person whether Labour is on their side or not, they’re unlikely to give you a resounding “yes”.”

    Yes, that’d be because “labour” means “employees”.

    “Capitalism isn’t all bad.”

    Unless you haven’t got any capital, of course. In which case, you have to become an employee.

    “Enterprise isn’t about the bad bankers who innovated their way to destruction via dodgy new asset classes based on bad debts.”

    No, but banks were more profitable. And capitalists want to get the best return on capital, innit? (Which is why small business owners are often more radical than most about the banks. Oh, and that stuff the banks got up to, those new asset classes? That’d be “fictitious capital” and old socialist concept, but hey…)

    Other than that slight problem, I thought the book was really good and applaud you and Alex for your work in bringing the essays together.

    It’s clear you know a lot about enterprise though you don’t know as much about capitalism as a system – and one which involves a fairly significant split between capital and labour in terms of governance within the enterprise.

    But I particularly liked the recommendations on supporting co-operative and mutual enterprise – CMEs put power, wealth and opportunity in the hands of the many, after all.

  12. Mike Homfray says:

    Protectionist measures

    The only way forward – preferably at European level. Forget the free market, think localised production and strong tariffs and import controls. Globalisation must go.

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