Keir Starmer has called on the public to support small businesses by shopping locally and stressed the importance of small-and-medium-sized enterprises, which he described as “the backbone of the British economy”.
On Small Business Saturday, the Labour leader highlighted that SMEs account for over three fifths of private sector employment and said firms have “continued to do the UK proud” despite tax rises and growing costs.
Small Business Saturday is an annual campaign created to encourage consumers to shop locally in person and online at small businesses. The first of such events in the UK took place in 2013, and is held on the first Saturday of December.
Shadow Business and Industrial Strategy Secretary Jonathan Reynolds warned this week that 150,000 firms are paying out more than half of what they bring in to service their debt burden, while 75,000 firms are paying out more in debt than they are bringing in.
“Mounting debt combined with tax hikes, rising inflation and energy prices threatens to close the shutters on thousands of British businesses,” the Labour frontbencher said.
“Small businesses are the heart of our high streets, but they have been let down time and time again by the chaos and complacency of the Conservatives, which is choking off economic recovery.”
Labour announced earlier this year that it would scrap business rates entirely and replace them with a system that will “incentivise investment; promote entrepreneurship; and reward businesses that move into empty premises”.
Rachel Reeves said Labour in government would “oversee the biggest overhaul of business taxation in a generation” and its plan would allow businesses to “lead the pack, not watch opportunities go elsewhere”.
Opinium research found that 68% of businesses want to see a reform of business taxation in a way that levels the playing field between major online retailers and the ‘bricks-and-mortar’ high street companies with which they compete.
In the short term, Labour is urging the government to freeze business rates until the next revaluation and increase the threshold for small business rates relief from £15,000 to £25,000, to give SMEs a discount on their 2022/23 bill.
The Confederation of British Industry and 41 other leading trade groups, representing 260,000 businesses with nine million employees, called on Chancellor Rishi Sunak earlier this year to cut business rates in the Budget.
According to the trade associations that signed the letter, including the British Retail Consortium, UK Hospitality and the Federation of Master Builders, up to 50% of business investment is potentially subject to business rates.
Labour moved to force a parliamentary vote on cutting business rates in October after research from the party revealed that up to 332,000 businesses, employing over 800,000 people across the country, are at risk of closure.