Liberal Democrats

F6: Boosting Small Businesses and Jobs in the Post-Pandemic Economy

Motion as passed by conference

Submitted by: 12 members

Mover: Sarah Olney MP (Spokesperson for Business and Trade).

Summation: Lord Purvis (Lords Spokesperson for Trade).

Conference believes that:

  1. The economic recovery from Covid-19 starts with small business: small businesses are the backbone of our economy, the heart of our local communities, and they create the jobs we all rely on.
  2. Everyone should have access to good, decent-paying jobs.
  3. To cope with the unpredictable nature of the pandemic, people and businesses need certainty and long-term support - not last-minute announcements and knee-jerk reactions.
  4. We must rebuild a post-pandemic economy that is fair, creates new opportunities for people and tackles the climate emergency.

Conference notes with concern that:

  1. The UK's economy is 4% smaller than before the pandemic, and according to the Office for Budget Responsibility (OBR), it won't reach its pre-covid size until the end of 2022.
  2. 1.6 million people are out of a job, and there are 553,000 fewer people on payroll than pre-pandemic; according to the OBR, by the end of the year another 600,000 people will lose their job.
  3. Unemployment is disproportionately impacting the young and people from ethnic minorities, as people aged 16-24 are the likeliest to be out of a job, and young black people experienced the highest unemployment rate in 2020, reaching 42%.
  4. The Government is failing to create new jobs, with the failed Kickstart Scheme having thus far placed just 16,500 people in new roles out of a target of 250,000.
  5. Failing to support employment threatens the UK's economic recovery and takes away peoples' opportunities.
  6. Small businesses have suffered during the pandemic, taking on more than £104 billion in debt to stay afloat.
  7. The pandemic has damaged the UK's town centres and high streets, taking a toll on entrepreneurship opportunities, local services, local employment opportunities and face-to-face contact for those experiencing loneliness.
  8. Small businesses are in a rent-arrears crisis, with unpaid commercial rent estimated at £6 billion, affecting the hospitality and retail sectors the worst.
  9. The Government has threatened a wave of small business closures and job losses, by refusing to accompany the month-long continuation of trading restrictions with an extension of the full furlough scheme and the business rates holiday.
  10. The Federation of Small Businesses has warned that at least 250,000 businesses could close by the end of the year, while the number of companies in financial distress has risen at the fastest pace in seven years.
  11. Compounding the struggles of small business in the pandemic is the Government's terrible EU trade deal, which has led to a 25% drop in trade with Europe compared to 2019, and a staff shortage crisis that has brought many businesses to their knees.
  12. The Government has ignored the three million people excluded from all Covid-19 support schemes.

Conference reaffirms the Liberal Democrat commitments to:

  1. Develop a long-term economic strategy, setting out how the UK will invest in new industries, jobs and training, that will create a fairer, greener, more regionally balanced economy after the pandemic.
  2. Establish dedicated support schemes for the worst-affected sectors, such as hospitality, tourism, charities and the creative industries.
  3. Ensure that a large proportion of new jobs created are green jobs, encouraging innovation in industry to adapt to a green economy, carry out an audit of the skills which will be required, and ensure those who are unemployed due to Covid-19 are helped to reskill to fill them.
  4. Expand higher vocational training such as foundation degrees, Higher National Diplomas, Higher National Certificates and Higher Apprenticeships, including by transforming the broken Apprenticeship Levy into a wider 'Skills and Training Levy'.
  5. Fix the Self-Employed Income Support Scheme by extending it to cover the self-employed people who are currently excluded.
  6. The closest possible alignment between the UK and the EU towards customs union, single market and freedom of movement, including minimising tariff and non-tariff trade barriers and the non-lowering of environmental, food and animal welfare standards.
  7. Conference recognises the crucial role local government can play in supporting businesses in their area during the pandemic and helping them re-build such as the 294 businesses saved from closure by the City of York’s micro-grant scheme in 2020. Conference calls on central government to ensure local councils to have a leading role in Local Enterprise Partnerships as part of their work in supporting local economies.

Conference further calls on the Government to:

  1. Extend the fully government-backed version of the Coronavirus Job Retention Scheme, and the Self-Employed Income Support Scheme, at least until the end of 2021.
  2. Provide financial assistance to small businesses that experienced loss of revenue due to Coronavirus restrictions on their trading capacity or ability to stay open.
  3. Give all small businesses a cash injection and empower them to create new jobs, by quadrupling the annual Employment Allowance to £16,000 for two years, allowing them to pay zero employers' National Insurance Contributions on their first five employees - and consult on whether to increase the Employment Allowance long-term.
  4. Avert a wave of insolvencies and job losses by implementing innovative debt restructuring solutions for viable small businesses struggling due to coronavirus.
  5. Maintain the 5% reduced rate of VAT for hospitality and tourism until the end of the 2021-22 financial year.
  6. Give struggling businesses in the retail, hospitality and live events sectors relief on their deferred VAT payments, so that cash is available as working capital as they open back up.
  7. Fix the broken Kickstart scheme and develop a strategy to tackle unemployment among young people from a black and ethnic minority background.
  8. Support small businesses struggling to trade with Europe by:
    1. Doing more to listen to their concerns and seek technical solutions.
    2. Significantly increasing the £20 million SME Brexit Support Fund and broadening its eligibility criteria.
    3. Ensuring that all information SMEs need on UK-EU trade is readily available in a single platform.
    4. Appointing a new Minister for SME Trade, tasked with implementing the above measures and boosting small business trade.

Applicability: Federal.