Labour’s pro-business promise is wearing thin
Businesses need confidence to invest, recruit and grow, writes small business owner Simon Lancaster
As a business owner and the insurer of thousands of other businesses, it is extremely disappointing – though perhaps not surprising – to see the GDP data released this morning showing that the economy shrank in April.
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After a period of turbulence in the final years of the previous government, the Labour government was elected with many of its manifesto pledges centred on growth, stability and a pro-business stance. Like many other business owners, I was optimistic and supportive of that vision. Unfortunately, many of us have been left disappointed.
To be fair, there are mitigating factors beyond the government's direct control, such as the conflict involving Iran, but there is always an external challenge facing the economy. They have also made some positive decisions. However, I, along with many of the businesses I speak to, have found the government's first couple of years underwhelming.
Looking at its three main pledges:
Stability – Following the turmoil of the previous administration, stability has not yet been fully achieved. With signs of unrest within the Parliamentary Labour Party and speculation around the Prime Minister's leadership, the government risks appearing distracted and less able to deliver the positive changes businesses need.
Being pro-business – Sadly, many business owners feel the opposite has been true. Several policy decisions have been perceived as making life more difficult rather than easier for employers. I believe the Prime Minister and Chancellor understand what businesses need but may be constrained by differing views within their own party.
Growth – The government's flagship priority appears to have stalled, with today's ONS figures showing the economy moving in the wrong direction. Many businesses are not surprised; we have sensed these challenges building for some time. There is a growing concern that insufficient support for enterprise is holding back investment and confidence.
There is also a fear that if policy shifts further away from supporting business, uncertainty will deepen and economic conditions could deteriorate further. The government now needs to refocus on creating a genuinely pro-business, pro-growth environment.
Alongside positive rhetoric, it must take meaningful action: make it easier for employers to hire, particularly younger workers; reconsider increases to employers' National Insurance contributions; provide targeted support to sectors such as hospitality and haulage, which remain under immense pressure and are vital to the wider economy; and offer greater certainty on taxation by ruling out further increases, including to Capital Gains Tax.
Businesses need confidence to invest, recruit, and grow. Without that certainty, many will continue to delay decisions that are essential to driving the economy forward.
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Simon Lancaster is the CEO of SJL Insurance Services.
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