Labour’s New Deal for working people is to ‘make work pay’ by boosting wages, making work more secure and supporting workers to thrive.
The new government knows they will find support for those key principles not just among working people, but among the best company owners and directors, who already understand the value of ensuring their staff are rewarded for their work and supported in their workplace – it boosts motivation, productivity and improves quality and customer satisfaction.
But like any contract, a ‘new deal’ has to work for both parties – in this case, both the workers and the businesses, who will face increased wage and benefit costs for their staff.
Workplace changes such as the New Deal don’t come without a price – and this often falls hardest on our small and micro businesses, which account for a third of the UK’s overall employment – around 9 million working people.
NEN’s latest Business Barometer (Nov 2023) revealed that more than three quarters of business surveyed were already concerned that rising cost pressures could make their businesses unsustainable.
So if the New Deal is going to work, then there also needs to be a new deal for our hard-working small and micro businesses, who need urgent support to thrive and grow if they are to accommodate these increased workplace costs.
And in setting out its growth plan, the government needs to remember that the UK economy isn’t just about the high-growth, high-tech companies. Small and micro businesses account for 50% of the country’s GDP, 50% of its growth and 75% of its innovation.
Most importantly, they are the bedrock of our communities, delivering sustainable economies in their local environments, employing local people who put back into their regions. And because they are small, agile and employ local people, they understand the need to support their local communities, being flexible with their staff to enable them to accommodate family pressures, supporting local good causes and providing critical supply chains for the bigger corporates.
And if increased labour and HR costs put our small and micro entrepreneurs out of business, we don’t’ just those lose vital community resources, we also add a bigger burden to the public purse by increasing the number of unemployed.
Without growth in our micro and small businesses our new government’s mission to raise living standards in every part of the country cannot deliver the sustainable local economies we all need and want.
NEN recently published its Spring Policy Report, which set out its asks of the new government to enable the country to harness the potential of its micro and small businesses for the benefit of businesses and their workers alike. And we were delighted to see many of those asks in the Labour election manifesto, including unlocking finance for start-up and scale-ups; stamping out late payment of invoices; opening up competition to public contracts for small businesses and addressing skills shortages.
We urge our new Business Minister to bring forward a New Deal for businesses at the same time as its Making Work Pay legislation, creating a fair economic playing field for all working people – those striving to make their businesses thrive for the benefit of their employees and their communities.