Small Business Saturday – Celebrating the contribution of the UK’s small businesses

2nd January, 2013 2:40 pm

Step out onto Streatham High Road, Europe’s longest continuous High Street, and our small local independent businesses will tell you how hard 2012 was. They and the UK’s other 4.76 million small businesses are hoping for a more prosperous 2013.

As ever the banks continue to be a headache for them, not helped by a Government which has promised so much but delivered so little in increasing access to finance for profitable, successful firms that can’t get it.

Ministers’ Project Merlin and Credit Easing Schemes failed to resolve this problem and their Funding for Lending Scheme has yet to deliver the goods. So it is unsurprising that net lending to businesses has fallen by £13.5 billion over the past 12 months.

We started making the case for a British Investment Bank well over a year ago – a genuinely new and different source of finance for small businesses. Rather late in the day and after two and a half years in Government Vince Cable has followed our lead but so far there is little sign his Small Business Bank will be up and running much before the next General Election.

On skills, weaknesses in intermediate and technical skills continue to rank high on small businesses’ list of concerns. We must ensure our skills system meets the needs of businesses and provides everyone with a stake in our economy, including the forgotten 50% who don’t go to university. That is why we must build a One Nation economy, with a new gold standard vocational qualification (a Technical Baccalaureate), young people studying English and Maths until the age of 18, and more and better quality apprenticeships.

Ministers like to boast that they have created more than one million apprenticeships in the last two years but the rhetoric is not matched by the reality. In 2011/12 the number of apprenticeships for young people actually fell in seven out of nine regions in England and, for all their talk of the quantity of apprenticeships, there are widespread concerns the Government has degraded the quality of them since it came to office.

Then there is the lack of support provided by Government for small businesses out in the regions. The Regional Development Agencies weren’t perfect but many of them were doing a good job and held in high regard in their areas. The Government abolished them and put Local Enterprise Partnerships in their place but, as made clear by Lord Heseltine in his report last year, they were given little resources or powers to do a decent job.

If we are successful at the next General Election, we won’t replicate the mistakes of this Government – abolishing institutions for the sake of it and causing uncertainty. Instead we will work to improve LEPs so that they can effectively support businesses, make a real difference and be responsive to local economic circumstances.

Finally, Government could and should use its purchasing power to support British industry whose supply chains consist of many small businesses. So when making procurement decisions, the next Labour government will take account of the impact on jobs in contract criteria. The French, Dutch and the German governments do this within EU law – so will we.

There are many other things – too numerous to mention here – that small businesses need like the national insurance break we have advocated for micro businesses taking on extra workers. But above all, we must do more to celebrate the huge contribution they make to our communities and what they add to the unique character of our local neighbourhoods. There is a simple and effective step we could take towards this and we don’t need to be in Government to do it, not least because our many Labour local authorities can be its champion.

In the US they celebrate the role small businesses play on “Small Business Saturday.” This takes place on the first Saturday after Thanksgiving celebrations, one of the busiest shopping days of the year. In 2012 it took place on 24 November and on the day people are encouraged to shop at small independent businesses in their local area.

The concept, which was originally conceived of by American Express, is promoted by the Federal Government through the Small Business Administration. President Obama marked the day in 2012 with a well publicised visit to a small local independent bookshop with his daughters. Various US celebrities, such as tennis player Serena Williams and Hollywood actress Jessica Alba supported Small Business Saturday as well. As a result, consumers who were aware of Small Business Saturday spent a total of $5.5 billion (£3.4bn) in independent small shops on the day.

There is no reason why we could not hold a Small Business Saturday here in the UK to the same affect, encouraging more people to buy from our small businesses on one of the busiest shopping days of the year and celebrating what our small businesses do. Saturday 7 December 2013 – the first Saturday of the December Christmas shopping season – could be a sensible day to hold the inaugural UK Small Business Saturday. I have already written to American Express asking if they would agree to extend the concept to our shores. And this is something everyone can back regardless of political persuasion – I am pleased that Labour administrations in Manchester, Birmingham and London are already supporting this initiative.

A UK Small Business Saturday alone will not transform the fortunes of our small businesses but, as the US experience demonstrates, it will make a difference. Crucially, it would help ensure those who take risks, set up shop and provide jobs in our local communities get more of the recognition they so deserve – something we are determined to do.

Chuka Umunna is the Shadow Secretary of State for Business, Innovation & Skills and the Labour MP for Streatham

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  • Quiet_Sceptic

    SBS sounds a bit gimmicky. I think we should be looking at more challenging issues like parking in town centres and on the high street.

    For all the criticism of large retailers they are financially acute yet very few large or out-of-town retailers charge their customers parking fees and most that do have refund mechanisms so as not to deter custom. They recognise that the quick financial gain from charging for parking is more than off-set by the loss of custom.

    Small retailers, tending to be based on the high street, often don’t own or control their parking, they depend on the council and yet for councils there’s an inherent conflict of interest between what’s best for the council and what best for small businesses; it doesn’t see the financial impact from declining footfall and loss of custom. It produces the absurd situation of councils steadily increasing parking fees and yet expressing surprise and dismay about their declining town centres and high streets.

  • I doubt that a future Labour government would make it any easier for small businesses to win government contracts. In my experience, the last one put a large number of hurdles in the way. I was sales manager for a small web design company, and whenever a government (local, national, agency etc.) went out to tender, there were about 30 pages of pre-tender forms to fill in, a range of indemnity and ESCROW arrangements that would have to be met and the standard range of equal opportunities compliance forms. Being in the South West, our ethnic balance was wrong (too white), and our age profile was unusual (too old). I gave up after 3 bids. Turns out we were usually too cheap, and the awarding bodies didn’t understand how a small company managed it as their costs were so high.

  • NT86

    Small Business Saturday sounds like a PR stunt and a token gesture of goodwill to independent retailers and/or family-run stores. Doesn’t do anything to address the underlying problems they face. These businesses want to run all year, not on a random Saturday.

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