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Tuesday, 15 May, 2001, 17:00 GMT
Labour targets small business vote
Chancellor Gordon Brown
Brown: wants to make it easier to start new businesses
Labour has promised tax cuts for entrepreneurs, as it launches its manifesto for small business.

Chancellor Gordon Brown says he will extend the basic 10p tax rate to cover more small companies if Labour is re-elected.

There is little evidence of big ideas in small firms policy

David Sears, British Chambers of Commerce
And he has promised further tax measures for entrepreneurs and better access to finance to encourage more business start-ups.

He has also pledged to do more to tackle red tape, which small business leaders claim is strangling many enterprises at birth.


Tony Blair told an audience of businessmen in Leeds, on Tuesday, that Labour planned to have a "much greater focus on small business", if it won a second term.

"After all, it is those small businesses that will create the majority of jobs in the coming years.

"And many small businesses will grow to be large businesses," he added.

Mr Blair pledged to cut red tape by putting a time limit on regulations and forcing government departments to review the impact of new legislation.

He also pledged to simplify payroll administration for small firms and extend the role of the Small Business Service.

Labour's proposals were welcomed by The Federation of Small Businesses.

"It is all very promising, especially the acknowledgement that regulations have an adverse impact on smaller businesses," said spokesman Stephen Alambritis.

"It is now a question of translating the rhetoric into action as soon as possible in the new Parliament."

'safe proposals'

But the British Chambers of Commerce (BCC) were more critical.

BCC deputy director general David Sears said: "A separate manifesto for the small business community shows commitment and reflects the Labour Party's efforts in government to push small firms' interests higher up the agenda, embodied particularly by the creation of the Small Business Service.

"However, it is evident that a more radical shift in thinking is needed for the politicians truly to support the critical role small firms play as engines of UK economic growth.

"Business will welcome this as a 'safe' series of proposals, but with many already announced as government policy, there is little evidence of big ideas in small firms policy."

The BCC has backed Conservative proposals to set a regulatory budget for each government department.

It also wants tax laws to be simplified and a reform of taxation for self-employed people.

The BCC claims the burden of extra administration under Labour costs business 15bn a year.


Labour's new laws on parental leave and its welfare-to-work policies, which make employers administer benefits through the tax system, have been particularly unpopular with entrepreneurs.

Mr Brown has promised to give small businesses the power to scrutinise new regulations in advance.

But press reports suggesting Labour is planning a new government department for employment regulations and labour relations will raise fears of further burdensome legislation.

Labour has delivered a platform of economic stability on which small businesses can succeed

Small business minister Patricia Hewitt
According to Tuesday's Financial Times, the Working Life department would consolidate Labour's policies on work and the family.

The newspaper claims trade and industry secretary Stephen Byers is fighting the creation of the new department.

At the moment employment issues are handled by the Department of Trade and Industry (DTI), which has managed to win important concessions for small businesses on such issues as the working time directive and union recognition.

Good progress

Patricia Hewitt, Labour's small business and e-commerce minister, said the party would aim to make Britain the best place in the world to start a business.

"We're making good progress. Arthur Anderson recently published its global entrepreneurship survey, voting the UK overall the best country in the world for entrepreneurs," Mrs Hewitt said.

With business confidence among UK manufacturers suffering the biggest fall for two years it is time for the government to support business

Lib Dem trade and industry spokesman Vincent Cable
In a second term, she said Labour would help more new businesses get access to finance, with the introduction of early growth funds for companies looking to raise up to 50,000.

She also pledged to help small and medium-sized businesses save time by carrying out all their transactions with government over the internet.

Conservative plans

The Conservatives are also making a strong play for the small business vote, promising to slash red tape and cut 200m from the uniform business rate.

They would also ditch Labour's controversial climate change levy, or carbon tax, which will lead to an increase in gas and electricity bills.

The party would also pay the Working Families Tax Credit as a benefit, relieving businesses of the task of administering it.

The Liberal Democrats would also pay Working Families Tax Credit as a benefit.

And they are committed to slashing bureaucracy to encourage entrepreneurship and introducing tough measures to curb monopolies and cartels.

Vincent Cable, Lib Dem trade and industry spokesman, said: "With business confidence among UK manufacturers suffering the biggest fall for two years it is time for the government to support business."


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