Lib Dems steal march on rivals to win over smaller companies

As last week’s curious ITV leaders’ debate played out in Salford without Theresa May or Jeremy Corbyn, an alternative event in central London at least came a little closer to offering the full complement of the big parties.

Labour, the Conservatives, the Liberal Democrats, Ukip and the Greens were all vying for the small business vote at a hustings organised by Enterprise Nation, an organisation for entrepreneurs, on Thursday evening. At least that was the plan: half an hour after the scheduled start time, there was still an empty lectern where Matt Hancock, the Tories’ digital and culture minister, should have been. The debate began without him, although the delayed start to proceedings meant that the first question was still being dealt with when Mr Hancock turned up.

Perhaps he should have stayed away. Before the debate began, 39 per cent of the assembled audience of small companies and advisers said that they would vote Conservative, compared with 15 per cent each for Labour and the Liberal Democrats, while 24 per cent were undecided.

By the end of the evening, support for the Conservatives had fallen to 25 per cent, Labour had edged up to 19 per cent and the Liberal Democrats scored an impressive 38 per cent.

Most of the businessmen and women in the room acknowledged that the unlikely turnaround still does not mean we should expect small companies to turn out in force for Tim Farron et al on June 8. It appeared to be more of an endorsement of a solid showing on the night from Lord Palmer of Childs Hill, the Liberal Democrats’ small business spokesman in the House of Lords, than a genuine sign of voting intentions.

At the start of this month a survey of 2,300 entrepreneurs suggested strong support for the Conservatives among small businesses, with 41 per cent intending to vote Tory compared with only 13 per cent who planned to back Labour and 9 per cent saying that they would support the Liberal Democrats.

This, though, was a night for the underdog. Ibrahim Dogus, chairman of SME4Labour, first-time parliamentary candidate and a leisure entrepreneur nicknamed the “king of kebabs”, had offered an unpromising opening gambit: “For some, Labour may not be the party of small business, but for me it is.”

There were murmurings of discontent when someone floated the idea of a “Britain under Jeremy Corbyn” and Mr Dogus was mocked by Mr Hancock with cries of “Diane Abbott” when he mistakenly said that Labour would create a £500 billion investment bank (the figure in the party’s manifesto is half that). However, he appeared to win over some in the audience with Labour’s pledge to reintroduce a lower rate of corporation tax for small companies.

Lord Palmer struck a chord with pledges including a start-up allowance that meant that new entrepreneurs would be assisted with living costs in the first few weeks of their business. He also echoed the feelings of many in the audience when he responded to Mr Hancock’s defence of “making tax digital”, the contentious plan to force companies to file tax returns electronically and more regularly.

“You can have digital for medium-sized businesses,” he said, “but for small businesses to have five digital tax returns a year is more than most people can manage. They will have to employ accountants to do it. There’s enough strain from business rates and all the other issues companies suffer from.”

Rachel Collinson made a decent fist of making the tricky case for the Greens being the party of small businesses. Given the level of discontent with business rates on the night, and all the parties merely promising yet another review of the unpopular tax, she probably should have been given more time to expound her proposal for replacing it with a land value tax.

Unsurprisingly, Brexit loomed large. Jacqueline Watson, founder of Citrefine International, a manufacturer of insect repellents, told the panel she feared that the voices of companies such as hers operating in industries governed by European legislation would not be heard during the negotiations.

The Tories

The Tories are seen as unusually interventionist

John Spindler, chief executive of Capital Enterprise, a business support organisation, expressed concern that the European Investment Fund was already cutting support for British technology investors, before Brexit.

Addressing Mr Hancock, he said: “What are [UK investment] funds supposed to do in the next two and a half years? Are you going to do a transition? Otherwise the people who create jobs and innovation in the things in your manifesto, like electric cars and artificial intelligence, will have to hibernate for two and a half years.”

Mr Hancock replied: “We are talking to the Europeans to try and solve that problem.”

Yet Brexit was far from the only game in town. When asked recently by the Federation of Small Businesses to identify the single most important issue, 76 per cent identified an issue other than Brexit as the top priority for the next government.

However, no one on the panel, which also included Ernie Warrender, of Ukip, could say much to assuage significant concerns over issues such as rising costs, the potential for tax rises for the self-employed, access to skilled workers and the decline of the high street.

Gareth Austin-Jones said that small companies detected a less business-friendly tone in the Tories. Mr Austin-Jones, commercial director at Cocorose, a maker of foldable ballet pumps, switched his vote from Conservative to Liberal Democrat during the debate, but was not for turning at the ballot box.

The company was founded by Janan Leo in 2007 and its customers include Dame Helen Mirren and Pippa Middleton.

“Everyone [believes] the Tories are going to win, so there is an air of arrogance that comes through, and that was evident here. But I will vote Conservative. It’s necessary for the economy that we have a strong government with a significant majority,” he said.

“The Conservatives under David Cameron were more interested in small businesses. Now it is all about how they deal with Brexit and small business is not a priority. I really feel that.”

The event suggested that a Labour Party that “leans to the left” and Tories that “start introducing statutory worker rights and [offer] no guarantees that national insurance contribution rates will not rise”, as Emma Jones, of Enterprise Nation, put it, are not proving an attractive proposition for many small businesses, even if most owners will end up voting for one of the two.

The big parties’ small business policies in brief

Conservatives 
Business rates
 Another review, although this time with a promise that this will result in a policy that finally addresses the imbalance between the high street and online retailers

Procurement One third of central government contracts to go to small and medium-sized businesses by the end of the next parliament. There was an existing target to spend £1 in every £3 of central government spending by 2020

Supply chains Contractors that do not comply with the “prompt payment code”, a voluntary scheme that promotes fair payment practices, would lose access to government deals. The PPC stipulates paying bills “on time”, but not how long payment terms are

Self-employment A promise to extend auto-enrolment, the state-mandated workplace pension policy, to the self-employed. Follow up on the forthcoming Taylor Review to ensure that “gig” economy workers are not being exploited. Simplify taxes for the self-employed and small businesses

Exports Provide more help for small and medium-sized businesses to find new markets and customers overseas, including using state backing to ensure that no “viable UK export fails for lack of finance”

Labour 
Tax
 Reintroduce the lower “small profits” rate of corporation tax. Exemption for the smallest companies from government plans to introduce digital filing, which will mean businesses have to produce five returns a year instead of one

Investment Create a National Investment Bank with £250 billion of capital from public and private sources. Would support a “network of regional banks” focused on supporting smaller businesses, including long-term finance for r&d spending

Business rates Also pledging a review of the system, as well as exemption from the tax for new investment in plant and machinery, and an improved appeals process

Procurement Government contractors to pay suppliers within 30 days, with fines for late payers. System of arbitration to ensure prompt payment in the private sector

Liberal Democrats 
Finance
 Expand the activities of the state-owned British Business Bank, a project championed by Sir Vince Cable when he was business secretary in the coalition government, so it can play a more active role in supporting small and medium-sized companies

Start-ups Create an allowance for those building a new business to help with living costs in the first few weeks of the business

Business rates It’s a clean sweep — yet another party calling for a review. The Lib Dems say that business rates should be a priority for any future business tax cuts

Broadband Prioritise small and medium-sized businesses as part of roll-out of super-fast broadband across the UK. Get non-technology companies up to speed with state support for their digital investment, with an aim of doubling the number of smaller companies trading online

Please follow and like us:
Me
Jack Cunningham

I may be young, but I know what I'm doing! Born and raised in the South of the UK, I like cars, money and holidays. Spend most of my time petting my cat and eating bagels.