Home News Have our politicians lost the plot on business?

Have our politicians lost the plot on business?

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Theresa May

When Chancellor Philip Hammond proclaimed to the Conservative Party conference: ‘We are the party of business”, it raised eyebrows.

Not because of what he said, but because he felt the need to say it at all. The Conservatives’ image as business friendly has been tarnished of late.

Rob Johnston, Chief Executive of Cumbria Chamber of Commerce, said: “We detected anti-business rhetoric in the manifestos of all three of the main parties at the General Election last year.

“Nothing has happened since then to change that perception.

“They all say they support business but they need to translate the warm words into actions and policies. Businesses create the wealth that pays for public services and it seems at times that politicians have forgotten this.”

Here we analyse the Conservative and Labour conferences, to see specifically what they’re offering to businesses.

 

Conservative logoConservatives

Strangely, Business Secretary Greg Clark didn’t address the conference in person this year. He did, however, attend a fringe meeting where he hinted at changes to business rates to help hard-press retailers.

In his absence in the main hall at Birmingham, it was left to Chancellor Philip Hammond to take up the mantle of business champion.

His headline pledge was reform of the apprenticeship levy.

Levy-paying employers will be able to pass on up to 25% of their levy money to businesses in their supply chain.

He also announced plans to “engage with businesses” on further changes to the levy, which has led to a fall in apprenticeship starts.

Rob said: “Philip Hammond’s measures are a step in the right direction.

“We need a more flexible system to ensure that businesses of all sizes can find and train the workforce they need.

“The Chancellor is right to heed our calls for large firms to be allowed to transfer unused levy funds down to smaller firms in their supply chain.

“There are a great many SMEs in Cumbria who supply large businesses and should benefit from this. It will help them to access high-quality apprenticeships and so close the growing skills gap.

“Ministers also need to address directly the issues faced by smaller firms.

“The vast majority of businesses in Cumbria are too small to pay the levy, which applies only to those with a pay bill of more than £3m a year, but many of these smaller firms find it difficult to fund apprentice training.

“Ending the 10% co-investment that SMEs now have to pay towards apprenticeships would encourage more firms to take on and train new talent.”

Elsewhere at the Conference, Transport Secretary Chris Grayling announced the go ahead for a Grizebeck bypass on the A595 north of Barrow, relieving the notorious pinch point at Dove Ford.

Rob said: “That’s long overdue and a very welcome development.”

Click here for our analysis of the Migration Advisory Committee’s report

But he wasn’t impressed by the news that the Government will accept the findings of the Migration Advisory Committee, which will make it harder for Cumbrian employers to recruit low-skilled migrant workers after Brexit.

Rob said: “Cumbria faces particular challenges around a shrinking working-age population, which mean we need to attract younger people to come and live here just to sustain the businesses we have, never mind grow.

“The Migration Advisory Committee’s proposals will make that harder.

“Through the British Chambers of Commerce, we made a compelling case for a flexible immigration policy that meets the needs of Cumbrian employers. It is bitterly disappointing that the Government hasn’t listened.”

Philip Hammond
Philip Hammond

Labour logoLabour

Shadow Chancellor John McDonnell announced a swathe of polices aimed at boosting workers’ rights, strengthening the hands of trades unions and reversing many of the Conservatives’ privatisations.

They include:

  • Workers to have trades union rights from day one, whether in full-time, part-time or temporary work.
  • A ban on zero-hours contracts.
  • Raising the National Living Wage to £10 an hour.
  • A third of seats on company boards allocated to workers.
  • Companies with 250 or more employees required to transfer shares each year into an Inclusive Ownership Fund, building up to 10% of the firm’s equity, with dividends paid to employees and the state.
  • Renationalisation of water, energy, Royal Mail and rail, and withdrawal from existing PFI contracts.

Rob said: “The proposal for Inclusive Ownership Funds amounts to partial nationalisation of every company in the land with more than 250 employees, without any compensation for existing shareholders.

“It will certainly deter businesses with just under 250 staff from recruiting, and then seeing their shareholders’ funds diluted.

“And what overseas business is going to invest in the UK with the threat of this hanging over them?”

He continued: “Many of Labour’s proposals on workers’ rights are well intentioned but will harm the very people they are trying to help.

“We know from research we carried out this year that some Cumbrian businesses struggle to pay the National Living Wage as it is. An increase to £10 an hour would certainly destroy jobs here.

“As the Taylor Report into working practices recognised, our flexible labour market has delivered record levels of employment. Labour’s proposals, such as banning zero-hours contracts, would jeopardise that.”

Shadow Business Secretary Rebecca Long-Bailey also addressed the Labour conference in Liverpool.

Much of her speech was directed at the decline of retail in town and city centres, promising “governmental action to reinvigorate high streets”.

She also promised reform of business rates including annual revaluations, exempting plant and machinery from revaluations, a fairer appeals system and ultimately a “fundamental review” of the whole system.

Rob said: “That’s what we wanted to hear. Removing plant and machinery from revaluations is a no brainer. The existing system is a tax on investment.

“We’ve been saying for years that business rates aren’t fit for purpose and we need a better system. Labour seems to be listening on this issue.”

John McDonnell
John McDonnell

Neither party made much of nuclear energy.

Rob said: “Labour did pledge to meet 60% of the UK’s energy demand from renewable or low-carbon sources within 12 years, but there was no specific mention of nuclear new build.

“We’d have liked to see both main parties commit to put public funding into NuGen’s Moorside project in Cumbria. That’s the key to salvaging the project, which is vital to Cumbria and the UK’s energy security.

“The other area where both parties let us down is Brexit. Businesses are desperate for clarity on what our future trading relationship with the EU will be and with six months to go we still have no idea.

“The Conservatives are hopelessly divided while Labour appears determined to vote down any deal that Theresa May comes back with in the hope that will bring down the Government.

“We appealed after last year’s General Election for the parties to work together on Brexit in the national interest. Sadly, it hasn’t happened.”

 

 

© Cumbria Chamber of Commerce

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