Chuka Umunna: Empowering our businesses will be key Labour policy

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WE know it has been an incredibly difficult few years for businesses large and small, but thanks to the determination to succeed and sheer hard work from our businesses the recovery which stalled in 2010 has kicked back into life.

That said, we know the environment is far from an easy one and there is more which needs to be done to enable businesses and individuals to achieve their aspirations. 

After four years of Conservative-led Government, wages after inflation are on average £1,600 a year lower than in 2010. This is affecting people’s spending power, which hurts businesses – we are in the midst of a cost of living crisis.

The costs and impediments small businesses face have spiralled. Business rates have rocketed by £1,850 on average since 2010. 

The Conservatives promised to rebalance Britain’s economy across all regions with an export and investment-led boom, but they abolished regional development agencies without putting in place a proper replacement and their flagship Regional Growth Fund has been mired in chaos and delay. Now the Government’s own figures show the scheme failing to meet its private investment target by almost £1bn

Our businesses are still struggling to get finance from the banks. Lending to small and medium-sized firms is down over £2.8bn in the last year while net lending to all businesses is down over £56bn since 2010. And businesses – like the customers they serve – have been subject to energy price hikes.

During the Industrial Revolution, Yorkshire helped Britain to lead the world as an economic power. Then, Britain’s economy was far bigger than that of China.

Now, while the rapid rise of emerging economies is intensifying competition, it is also creating huge new markets and new opportunities.

To plan for the future and determine where to deploy investment, businesses need a stable environment and Government to adopt a long-term approach stretching into the next decade not just this one.

We are called the Labour Party because we were founded to help working people and to ensure people have good, secure, work that pays a wage you can live off. But you can’t be pro-jobs unless you back the people who create them, which is what we will do if we are given the privilege to serve in office next year.

It starts with recognising the contribution that our businesses make. That is why I instigated Small Business Saturday in the UK, which has become the country’s biggest celebration of business in a generation. 

Next, it means doing what we can to reduce the costs of doing business in the short term. We will cut and then freeze business rates from 2015/16 saving business properties an average of £410 over two years. We are committed to maintaining the most competitive corporation tax in the G7. The energy price freeze which we will implement for 17 months after the election would save average small businesses £5,000 and we will increase competition in the banking sector so you get a better deal. 

But we need to make the right calls for the long term too, which is why earlier this year I launched Agenda 2030. Businesses do not work to four and five-year election cycles but look far beyond that – I think politicians should work to the same horizons. There are four key parts to our plan: 

First, we must release the talents of all our people. This needs to include the forgotten 50 per cent who don’t go on to university. We will ensure there are clear vocational as well as academic pathways, from high quality apprenticeships right through to technical degrees. 

Second, to capture new markets around the world, we must put innovation at the heart of our economy, so we solve tomorrow’s problems today. So we will put in place a long term framework for funding science and innovation.

Third, we must ensure government sets clear strategic direction, supports the development of industries where we have a competitive edge, and creates a more certain environment for investment.

We must back sectors where we are world-beating or have the potential to be so. We will give more power and funding to city and county regions, because decisions should where possible be made locally. And we will invest for the long-term with an independent National Infrastructure Commission.

Finally, we must engage with the world beyond our shores, including the EU. The biggest threat on the horizon for British business is a potential UK exit from Europe which many Conservatives flirt with and which Ukip campaigns for. Our job as policy-makers is to empower you and do all we can to enable you to fulfil your potential. That is what we will do if elected next year.

Chuka Umunna is a Labour MP and the Shadow Business Secretary.