Economic ignorance


images (209)Speeches yesterday and today in the Brighton Centre suggest that neither Jeremy Corbyn nor John McDonnell really understand some very basic principles and activities of Government in relationship to business and the economy. In practice this makes them little different to the current Government but two wrongs don’t give us a healthy economy. The speech from John McDonnell included the following phrases:

We will dynamically grow our economy.

We will strategically invest in the key industries and sectors that will deliver the sustainable long term economic growth this country needs.

Economic growth that will reach all sections, all regions and all nations of our country.

The problem with this sort of language, something that could so easily have been spoken by George Osborne, is that economic growth does not come from Government intervention. Only businesses can create economic growth, no matter how well or badly the Government of the day supports them to produce this growth. It is clear that Governments need to set a context in which business and economic growth can take place which can include setting out conditions for good sustainable growth but no Government can centrally direct economic growth into local settings. What is needed is a Government that is willing to listen to SMEs and in particular Small and Micro Businesses and to adapt their plans and policies to enable such small businesses to prosper. In many senses it is the Green Party rather than Labour or Conservatives that understand micro businesses. In many senses John McDonnell or indeed George Osborne could both benefit from speaking to colleagues within the Green Party.

Today we are to hear that Jeremy Corbyn intends to extend Maternity and Paternity benefits to the self employed. I am certain that there will be a few cases where this sort of intervention will help. However most sole traders and micro business owners will not benefit from this, taking time off from the business for extended periods usually means the business itself will begin to falter, irrespective of who will pick up the cost for the time. Most self employed people would benefit far more from meaningful business support and mentoring services, and as mentioned above from a Government that really understands their situation.

One element that will help some small businesses from either Government would be procurement arrangements that go much deeper than the approach taken by the coalition. Although they committed to procurement that ensured SMEs delivered 25% of the Government spending, this did not distinguish between Micro Businesses (1-9 employees) and Medium sized Businesses (50-199 employees) yet there is clear evidence that it is Micro Businesses and Small Businesses that really help to lift the economy. It is these businesses which need both Parties to begin to understand them. Who will tell these Politicians?

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About ianchisnall

I have a passion to see public policy made accessible everyone who want to improve the wellbeing of their communities. I am interested in issues related to crime and policing as well as in policies on health services and strategic planning.
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