Labour strides into Enterprise Zone

Clare Dowdy reports on Labour’s agenda for SMEs, which includes untangling red tape and plans for an Internet site

Last week the Industry Forum announced Labour’s agenda for small and medium-sized enterprises, its ideas for helping them get off the ground and keeping them afloat. The package is a culmination of discussions held by the various task forces set up to report back to the Industry Forum earlier this year, and as such had input from Sir Terence Conran and the Design Council.

Labour party leader Tony Blair outlined the issues on which Labour intends to do battle with the Tories in the next election and put particular emphasis on late payment and the red tape inflicted on SMEs.

Many of these plans will be serviced through the party’s so-called Enhanced Business Links. Labour has always laid claim to the original proposal of Business Links and criticises the Government for not only hijacking the idea, but implementing it poorly. Now the party is keen to strengthen the network: “We need to … raise their profile and quality,” says Blair.

While much of the Labour package is still at consideration or review stage, an on-line information system has been researched and developed. It is aimed at better aiding start-ups and firms with fewer than ten staff, who traditionally have been neglected by Government, Labour claims. Andersen Consulting is developing a site on the Internet to be available to all firms with a PC or via kiosks in Business Links.

Called the Enterprise Zone, the Internet proposal is an idea from Labour’s small-business spokeswoman Barbara Roche. While a spokeswoman for Roche admits the quality of information presented within the Enterprise Zone could not be guaranteed, she claims “we would set high standards, and encourage users to provide feedback on the services provided, so that any problems could be quickly rectified”. She adds: “Having talked to SMEs up and down the country, it was an idea whose time was right.” Although the system is not being piloted, if approved it will kick off as the party comes into power.

One way to win businesses over is to promise them help in times of financial instability. Labour didn’t miss the opportunity at the forum to give weight to easing the burden of late payments and debts. It announced reforms of existing systems as well as the introduction of new ones.

Small design groups are well-positioned to benefit from Labour’s proposals for a more paper-free business world as the party looks at ways to simplify and cut red tape, perhaps by having single information points accessible on computer or at Business Links. “Small businesses are drowning in paper,” says Roche’s spokeswoman, adding that small design firms in particular would welcome cutting down paperwork through the introduction of computerised systems such as on-line VAT returns.

Meanwhile, Labour has jumped on to the late payment, debt and training bandwagon, which will all be made more small-business-friendly. The party is determined to change the culture which regards late payment as an acceptable business practice, says Blair, by removing all financial incentive to late payment and introducing a statutory right to interest by companies above a given threshold.

Britain needs a culture that helps more businesses trade through their difficult periods, according to Blair. “Labour will introduce a legal right for a company in financial difficulty to a moratorium on its debts for a limited period to give it breathing space,” says a party spokesman.

And the party will work in partnership with the private sector to establish a University for Industry, through which programmes aimed at the needs of small firms will be available.

It is difficult to assess the impact such a package would have on SMEs at this stage, though the response at last week’s conference was generally very positive.

The question now is how well these proposals will turn into hard policy, and, beyond that, whether Labour will be in any position to implement them. Only the next General Election can tell.

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