Over the summer I met with a successful business owner who has seen the ups and downs in business under successive governments since the 1980s. He was very clear: businesses do better under Labour governments.
To listen to the debate in the Commons and media over the last five years, you could be forgiven for thinking that this isn’t the case.
The Conservatives like to present the stark choice of competence versus chaos, especially when it comes to business and the economy. And I agree: there is an issue of competence versus chaos, but it is not Labour that comes out of the comparison worse off.
In government, Labour tightened competition policy and attracted higher annual growth in foreign direct investment than both France and the US. We maintained the second-highest G6 productivity growth, in particular by supporting business services and distribution sectors.
Overall, we oversaw a higher GDP per capita growth than any other G6 nation between 1997 and 2010.
Labour stepped up to the challenge of securing the future of the next generation of entrepreneurs, with a decade of growth in the “knowledge economy” that outstripped EU performance. Unlike the Conservatives over the last five years, we took our responsibility to young people seriously through our consistent investment in Higher Education.
Labour understood the need to hand power and resources to locally-run organisations, not least through the Regional Development Agencies. The Coalition government’s Local Enterprise Partnerships, in contrast, receive no government funding and leave whole swathes of the country with no coverage whatsoever.
While the Conservatives tried to explain the singular failure of the Funding for Lending scheme, which saw loans to SMEs and start-ups fall by around £2.2 billion in just 18 months, Labour was outlining a long-term strategy to secure the future of small businesses through a network of Regional Investment Banks.
In government, Labour began a programme to cut corporate tax avoidance which was projected to bring an extra £100bn to the Treasury in the four years after 2010: good for the economy; good for businesses; and good for every community that would benefit from the increased revenue that is rightfully ours. The Conservatives scrapped those plans, and collected the much lower figure of £25 billion instead at a cost of over £1,000 for every person in this country.
The fact that we find ourselves on the wrong side of the competence-versus-chaos argument is our failure: not of our economic record, but of our conviction and our ability to challenge that tired, received wisdom that it is the Conservatives rather than Labour who can be trusted to look after businesses.
There is an issue of competence versus chaos, but we need to make sure people understand it is Conservative chaos that is the real threat to long term prosperity.
Labour can be proud of its record in government. In opposition, we must level our scrutiny squarely at the economic credibility of this Government. But we need to do so in order that a positive Labour vision be trusted.
Bill Esterson MP
Shadow Minister for Small Business