–
CHECK AGAINST DELIVERY-
Jeremy
Corbyn, Leader of the Labour Party, in a speech to the FSB in London today,
said:
“I
want to start by saying thank you. Thank you for inviting me here today and for
that introduction.
But,
most of all, to thank you all the Federation of Small Businesses for the role
you are playing in holding the government to account. Not least in forcing the
retreat last month, when, for now at least , they had to drop their 22 percent
increase in the National Insurance rate for the self-employed.
You
are respected on all sides of politics because you speak with the authority of
your members; the sole traders, the entrepreneurs, the small businesses and you
are effective, because you reflect the views of those members.
Like
the best trade unions, when you say something, people listen and if they don’t?
Well, just ask the Chancellor.
Labour
does not believe that extra tax burdens should be falling on low and middle
income workers, whether self-employed or directly employed.
And
we also believe that if we are to restore faith in politics, then politicians
have to stick by their word.
That
means not breaking a clear manifesto pledge the Conservatives made that they
would not increase National Insurance.
The
Government’s decision to push a £2 billion tax rise on low and middle-earner
self-employed broke that pledge. They hoped no one would notice. Well, we
noticed. You noticed.
And
what we have also noticed is that, while most of us have had to swallow seven
years of austerity, some are being given hand-outs on an extraordinary scale.
George
Osborne, and now Philip Hammond, have given the term ‘welfare state’ a whole
new meaning – welfare for the wealthiest.
The
Tories have cut the corporation tax rate for bigger companies, from 28 per cent
in 2010 to 17 per cent by 2020.
Over
the six years from 2016 to 2022, the total giveaway, the total revenue lost to
the public purse, will be £63.8 billion, according to the government’s own
figures.
And
let’s be clear, all of that giveaway will go to big companies.
Remember,
the corporation tax rate for small companies in 2010 was already, under
the previous Labour Government, set at 21 per cent.
That
means that by 2020, big companies will have had an 11 percentage point decrease
in corporation tax, while the rate for small companies will have been cut by
only four percentage points.
And
the differential between big and small companies will have been eliminated
completely, with both on 17 per cent.
So,
there has clearly been a bias here in the approach of the Government.
A
bias against small business.
A
bias that was evident in the attempt to increase national insurance for the
self-employed.
A
bias that holds back hard working people who want to make a living
independently.
A
bias against entrepreneurs who want to start and build new businesses; creating
jobs, innovating and helping to make Britain richer. Not for the very rich few,
but for the many.
Labour
will have a different bias.
Yesterday
we reaffirmed our commitment to a Real Living Wage.
Low
pay and in-work poverty don’t just hurt those directly affected, they mean more
public money going on in-work benefits instead of investing in our future. And
they mean fewer pounds going to your businesses.
We
know that some of you will struggle to pay your staff more. That’s why we have
promised additional support for your businesses, and are looking at expanding
and reforming the Employment Allowance.
We
will support those striving to make a living through self-employment and in
small businesses, not just because it is the right and fair thing to do, but
because millions of jobs and the future of our country depends on it.
Labour’s
business team, our shadow Business Secretary, Rebecca Long Bailey, and our
Shadow Minister for Small Business, Bill Esterson, have been working hard on
this.
They,
and the Shadow Chancellor, John McDonnell, tell me how important their
relationship is with you, how valued your voice and insights are.
So,
I want to share with you today the approach that will guide our relationship
and then explain how I see it working in practice.
Firstly,
Labour believes in fair taxation. So our policies will follow two cast-iron
principles forged in our values:
Any
tax rises will fall most heavily on those with the broadest shoulders and will
be a something-for-something deal. When we ask for more contributions we’ll be
clear about what you’re getting in return.
Secondly,
we want to level the playing field to ensure that no one is being held back due
to unfair advantages of the economically and politically powerful using their
entrenched positions to hold back the enterprise of others.
And,
finally, we will invest to give you the best platform to succeed, with
world-leading infrastructure: digital, transport and energy, as well as better
access to growth capital, whether it is through loans or equity.
Let
me look at those points in more detail.
When
I say any tax rises will fall on the broadest shoulders, I want to make it
clear today that we will not raise the small business corporation tax rate.
What
we cannot accept, however, is that it is right or necessary for big companies
to have been given a 40 per cent cut in their corporation tax rate, at a time
when others are suffering austerity and the budget deficit remains out of
control.
Britain
has the lowest corporation tax in the G7, now by quite some distance.
So,
corporation tax for bigger companies will move closer to the levels of other
major economies.
But
it will be a something-for-something deal, we will use that extra revenue to
invest in skills.
Employers
are telling us that they need a more skilled workforce and that they struggle
to recruit.
Which
is hardly surprising when, in the last seven years, the further education
budget has been cut by one-seventh, or when the adult skills budget has been
cut in half
And
last year, as student maintenance grants were abolished, university
applications fell.
We
need a highly skilled workforce, and a state that can re-train and re-skill
people as the economy evolves.
That’s
why Labour has set out a vision for a National Education Service, from early
years to lifelong learning.
Because
we know that education matters, whether it’s high quality universal childcare
that allows you the time and space to start and develop your business.
Or
whether it’s the chance to re-train later in life; opportunity needs to be
there for everyone.
And
today too many people and too many businesses are being held back by the lack
of investment in training.
Which
leads me to the second element of our approach, a level playing field.
What
people running small businesses tell me is that they are fed up with there
being one rule for them and another for big business.
Whether
it’s tax avoidance, late payment to suppliers or business rates – giant
companies seem to be privileged and sometimes a law unto themselves.
No
one likes paying tax. We don’t wake up in the morning thinking, “Oh, I really
must pay some more tax today”. But most of us know that taxes are essential to
a civilised society and a successful economy.
Business
needs skilled workers and good infrastructure. People who run businesses also
have families who need the health and caring services their taxes fund.
So
most of us play by the rules. We do our tax returns, as you know, mine seems to
attract more attention than most but that’s okay, transparency is important.
But
some people don’t play by the rules, they use all sorts of elaborate ruses like
shell companies or tax havens or offshore trusts to side step the rules.
My
local independent coffee shop can’t spend thousands on accountants to avoid
paying tax but a big chain of coffee shops can and does.
And
small businesses can’t make sweetheart deals with the tax authorities like
Google or Vodafone seemingly manage to.
So
when we say we will clamp down hard on tax avoidance and legislate to close
loopholes, that’s not anti-business, it’s anti-cheating.
So
we will give HM Revenue & Customs more powers and more resources and I can
announce today we’ll save them one onerous burden, and I hope it’s one you’ll
approve of too.
In
last week’s budget, the chancellor bowed to pressure by delaying the
implementation of quarterly reporting for small businesses by one year.
That’s
not good enough; Labour is against small businesses having to report quarterly.
It’s a burden, a distraction, that will hold entrepreneurs back.
Labour
will scrap year quarterly reporting for small businesses with a turnover of
less than £83,000, to help you focus on growing your business.
And
we will tackle another problem that I know is a burning issue and overdue for
attention.
Small
businesses are owed £26 billion in late payments.
Cash
is king for any business and big companies are managing their cash by borrowing
– interest free – from their suppliers.
Some
of the biggest names in business are holding huge cash piles that don’t
actually belong to them.
And
I’m going to name some names based on the reports of a reputable credit agency:
Marks
and Spencer pays its suppliers 72 days over terms
E.On
– the German energy provider, currently pays 78 days over terms
Capita
– a major player in the public sector, pays 82 days over terms
Vodafone
– 84 days over terms
BT
Group – pays 89 days
National
Grid – a whopping 119 days
And
I could go on.
But
note this is ‘over terms’ and the terms they impose could be 45 days or 60 days
to start with. So, we’re talking about big companies paying their suppliers, in
some cases, six months or more after they have done the work or delivered the
goods.
It’s
a national scandal.
And
it’s not just late payment.
There
was also the case of Premier Foods charging companies to be on their supplier
list
And
of John Lewis demanding a ‘rebate’ from suppliers when their products sold
well, a kind of penalty for success.
And
I gather from what you have told me there are many instances of big companies
refusing to pay an invoice in full and then saying ‘sue me’ as if small
businesses have the time and money to fight legal battles against the
commercial giants.
We
will look at all of this because late payment and the other practices I’ve
mentioned are stopping businesses from growing and causing thousands to go bust
every year.
Late
payment kills jobs and holds back economic growth.
Bill
Esterson has been doggedly pursuing this issue in Parliament and I am keen that
we work with you to tackle this issue
There
are different options to assess.
Government,
through procurement, can ensure that anyone bidding for a contract pays its own
suppliers within 30 days. It’s normal now to ask for accounts and credit
checks, so this would involve no extra paperwork.
For
the private sector, we’ve been looking at the Australian system that involves
binding arbitration and fines for persistent late payers.
It
needs to be a system with teeth. A system that delivers a fair deal for small
suppliers
And
we want to work with you to get this right.
No
small business owner should have to go begging to the banks, or even
re-mortgaging their homes, just because a customer considers themselves too big
and too important to pay on time.
But
let me send a clear message to the captains of industry today, a Labour
Government will declare war on late payment.
Alongside
that, Labour will introduce a radical reform of business rates.
The
Government’s piecemeal concessions fall far short of what’s needed.
And
so, in consultation with business , Labour set out five points that will guide
our policies in government:
·
there
will be no “cliff edge” increases in rates and a fair and transparent appeals
process
·
we
will bring forward CPI indexation so that businesses aren’t paying more because
of how inflation is measured
·
we
will exclude new investment in plant and machinery from future business rates
valuation. We want to encourage, not discourage, business
investment.
·
we
will introduce more regular valuations to stop businesses facing periodic and
unmanageable hikes
·
Also,
we need fundamental reform of the business rates system … to ease the burden on
traditional high streets and town centres in the age of online shopping and to
create a fairer system of business taxation.
And
that brings me to the third theme of our approach to small business namely,
investment.
Britain’s
infrastructure is second rate and falling even further behind other major
economies.
And,
frankly, this government has an abysmal record. They have failed to modernise
the economy, whether it’s in broadband, energy, transport or housing.
And,
at the same time, they have not done enough to finance growth in the small
business sector.
That’s
why Labour is committed to establishing a National Investment Bank with
regional investment banks for every region of England.
This
year, the Welsh Labour government is creating the Development Bank for Wales.
Its
purpose will be to create and safeguard over 5,500 jobs a year by 2022 by
providing more than £1 billion of investment support to Welsh business over
that period.
This
has not come out of the blue. Labour in Wales has nearly two decades’
experience of working with the FSB and other business organisations.
It
has taken on board your feedback about the forerunner to the development bank,
Finance Wales.
And
my business team at Westminster will take a keen interest in the launch of the
Development Bank for Wales, and the work it does to generate growth and jobs.
The
prime minister regularly accuses me of wanting to bankrupt Britain by borrowing
money to fund investment.
But
as every businessperson knows there is a world of difference between borrowing
for capital spending and borrowing to fund the payroll and day to day
trading or service delivery.
The
risk of bankruptcy comes not when you borrow to invest in projects that will
deliver growth but when you give unfair tax breaks to big companies and the
wealthy, when you have a big deficit and not enough money to run public
services.
Labour’s
vision is of a richer Britain, a Britain in which hard working people are not
held back.
Britain
has more than five million small to medium sized businesses employing more than
15 million people; sixty per cent of the private sector workforce.
Labour
is committed to creating an environment in which you can grow, through fair
taxation, tough action to level the playing field, including on late
payment, and through investment in skills and infrastructure.
The
only thing we ask of you, as part of this deal, is social responsibility in the
way you operate. Fairness in employment, attention to health and safety,
safeguards for the environment, high service and product standards for your
consumers.
The
economy under the Conservatives is being held back by low investment, low
skills, low productivity and low wages.
They
believe the way for Britain to succeed is to win the race to the bottom. To
become a tax dodgers’ paradise, content with rising poverty, falling social
mobility and the next generation worse off than the last. It’s gone too
far.
A
productive economy requires government to have a partnership with business.
Building the platform for you to succeed. While guaranteeing fairness for all.
This
is a virtuous circle; good investment by government, good practice by business,
good public services, funded by a productive, growing economy with fair
taxation.
Your
businesses suffer when public services are in crisis.
When
people have to take time off to care for ill or elderly relatives, because
social care is in crisis.
When
people are in too much pain to work, but still waiting for an operation.
When
our schools and colleges aren’t delivering enough skilled workers.
I’ve
set out Labour’s three principles; fair taxation, a level playing field and
investment.
And
I want to add one final principle, to listen and engage with people like you,
the experts in their area.
I
think we need more experts, not fewer, informing our policy and politics.
I
started by saying that I saw the FSB as a trade union; standing up for your members.
The
Party I lead, the Labour Party, is as the name suggests, a party of workers.
But we’re also the party of co-operatives, of entrepreneurs, of owner managers
who work hard in their businesses.
And
that’s why it’s been a privilege to address you today.
Thank
you.”
