At the start of this week, my wife and I found ourselves immersed in the whirlwind of caring for our 16-month-old granddaughter. In the somewhat sleepless early hours, we couldn’t help but reflect on the idea of new beginnings.
This theme of change was also echoed just a few hours ago when Sir Keir Starmer’s Labour ushered in a new era for the United Kingdom.
Today, Starmer will visit Buckingham Palace, where, with the King’s blessing, he will form a new Government backed by a solid majority.
This significant victory will allow Labour to push its agenda through Parliament with relative ease. But what exactly does Labour’s plan entail for small businesses and the funding ecosystem that supports them?
What does Labour have planned?
Thankfully, the NACFB no longer needs to sift through multiple party manifestoes. Today, only Labour’s commitments matter.
When it comes to small to medium enterprise (SME) access to finance, Labour had outlined plans to enhance the role of the British Business Bank. Rather than creating new local mutual banks, seeking instead to utilise the existing infrastructure of the British Business Bank to improve access to capital for SMEs.
Rachel Reeves, soon to be the first female Chancellor, has committed to acting on late payments. While Labour’s campaign does not explicitly mention the Prompt Payment Code, their intent to address late payments is clear.
Additionally, Labour has touted co-operative and mutual models of ownership as alternatives to traditional equity financing from private investors.
This model can benefit SMEs by helping them retain control over their businesses while still accessing necessary funding. Although Labour does not specify a priority sector, this approach aligns with their broader goal of supporting sustainable and community-oriented business practices.
Labour also aims to create a regulatory environment that fosters innovation within the SME sector. Although details are sparse, there have been suggestions of an intent to streamline regulations to encourage innovative business practices and technologies.
Potential measures could include reducing bureaucratic red tape, providing incentives for R&D, and supporting tech-driven SMEs to scale their operations.
The NACFB’s commitment to brokers
Labour’s strong majority means it can implement measures more effectively than in a scenario with a closer outcome or indeed a coalition government.
However, a significant majority in Westminster does not necessarily equate to overwhelming support across the country. Tony Blair’s 1997 landslide victory is a pertinent example; Labour won a 179-seat majority, capturing 63.4% of Parliament, but only 43.2% of the vote.
Starmer will still face internal challenges, particularly from the left wing of his party and ambitious MPs vying for limited roles. We can probably expect the allocation of a lot more committee positions and the appointment of various industry Czars to manage these ambitions.
Numerous forces will work to keep this new power in check, including the NACFB. While there is ample support for necessary changes, the trade body will maintain its role as a constructively critical friend and an ally unafraid to speak truth to power.
The NACFB will continue to forge ever closer ties with Government, and our advocacy aims remain the same. As I shared in my opening address of last week’s record-breaking NACFB Expo, the Association remains a bridge between UK small businesses and the growing finance community it represents.
We will continue to advocate for intermediary-led lending as a driver for growth, a reimagined Bank Referral Scheme that prominently features brokers among options for SMEs declined funding, as well as greater autonomy for the British Business Bank to develop targeted guarantee schemes for a more sustainable future.
In this new era, the NACFB stands ready to champion the role of the commercial finance broker, ensuring that the voices of small businesses and their financial partners are heard and valued in the corridors of power.
Adrian Coles is interim chair at NACFB
