Following the announcement by Shadow Chancellor John McDonnell that Labour will back new businesses through the creation of 'strategic entrepreneurial hubs' to provide support for over 20,000 extra entrepreneurs a year at an annual cost of £25 million, Black Country Chamber of Commerce President Adrian Wright said: “We very much support the creation of 20,000 new businesses but the Labour Party must not fall into the trap of wanting the state to provide what the private sector does best.
“There is a role for the entrepreneurial state and we have seen opportunities created where local authorities and LEP have invested in developments that have led to new business opportunities. The remediation of contaminated land is probably a good example in the Black Country. Entrepreneurial hubs need to be left to those who do it best, the private sector, rather than governmental bodies. Nevertheless it is refreshing to see the opposition coming up with ideas at a time when the Secretary of State for Business, Innovation and Skills is announcing another 4,103 job losses in his department.
“I would like to remind both the Secretary of State and the Shadow Chancellor that small and medium sized enterprises (SME and MSB) provide most of the jobs and GVA in the UK economy. We need investment and incentives to support the creation of family owned, mid-sized, heritage employers, with long term aims and the capability to realise a positive returns on the support provided. These companies will grow steadily but will not sell out to foreign ownership, nor are they likely to resort to poor management practice (e.g. zero hour contracts) as they form part of their local communities and thrive because of the implicit trust they develop over time.
“Our current government has demonstrated its lack of understanding of industry: adopting short term practices never yields a sustainable economic ecosystem. We have seen this from practice in the U.S.A. On the other hand, the state (however entrepreneurial) intervening where the private sector already operates (e.g. with Growth Hubs) provides a poor return on investment.
“It is probably too difficult to expect both the government and opposition to come together and develop a long term strategy to grow our industrial base and protect it from unfair practice. Nevertheless, until this happens, the UK’s industrial heritage remains at risk. Chambers of Commerce across the country have considerable knowledge regarding what works and what does not. Alongside our partners such as the EEF, FSB, IoD and CBI, there must be a way to driving a new industrial agenda forward.”