Labour’s first test: Back Britain’s six million small businesses

Britain has spent two decades talking about growth while making life harder for the businesses most capable of delivering it. Small and micro businesses make up 99.6% of UK firms, employ around half the private sector workforce and are responsible for much of the country’s innovation, yet government policy continues to be designed around the needs of large organisations. If the new Prime Minister and Chancellor are serious about rebuilding the economy, their first priority should be the businesses already creating jobs, training local people and keeping high streets alive. Business111’s manifesto sets out a practical blueprint to help Britain’s smallest firms grow—and, in doing so, help the whole country prosper.

BUSINESS111 MANIFESTO FOR THE NEW LABOUR GOVERNMENT

A practical agenda for the UK’s most important employers, innovators and community anchors

Small and micro businesses are vital to the UK economy. They account for 99.6% of all firms, half of private‑sector jobs and three quarters of innovation, and are the lifeblood of every high street, supply chain and local community.

Yet they face rising costs, falling confidence, late payments, complex regulation, and a support system that has been hollowed out.

This manifesto sets out what the new Prime Minister and Chancellor must do to rebuild the UK economy from the bottom up, by backing the businesses that keep Britain working.

The last PM came into 10 Downing Street 2 years ago and he and his chancellor declared growth to be top of their agenda. They failed. The UK Economy has had little growth in 20 years and voters are feeling that lack of growth in lack of improvement to their living conditions. The next PM and Chancellor need to deliver growth for the good of all. Small and micro businesses are the key.

We need a Simple, Fair and proportionate Tax System

Small businesses aren’t tax dodgers. They make errors because they’re drowning in complexity. The Government must:

• Simplify tax rules for micro businesses and sole traders

• Create a single small business tax portal with plain‑English guidance

• Introduce a Small Business Standard Return to reduce errors

• Restore real‑person HMRC support, not chatbots and penalties

• Review National Insurance and dividend tax impacts on small employers

  

  Photo by Brett Jordan on Unsplash

A simpler system means more compliance, fewer mistakes, and higher revenue, without raising taxes.

The Cost Burden on Small Employers must come down

Small businesses face rising costs from wages, energy, rents and compliance. The Government must:

• Review National Insurance increases for small and micro businesses

• Freeze business rates for micro firms

• Extend energy support to small and micro businesses in high‑use sectors (hospitality, food, salons)

• Simplify employment law for firms with fewer than 20 staff

• Provide grants for heatwave adaptation (cooling, ventilation, insulation)

Small employers need breathing space, not more pressure.

Rebuild Local Business Support Infrastructure

Enterprise agencies, growth hubs and local support networks have been dismantled. The Government must:

• Restore local enterprise agencies with stable funding

• Create Youth Enterprise Hubs in every region

• Provide micro‑grants (£500–£5,000) for startups and community businesses

• Expand mentoring networks using local founders

• Rebuild local procurement so councils buy from small firms

Support must be local, practical and accessible, not buried in national portals.

Make Skills, Training and Apprenticeships Work for Small Firms

The current system is too complex, too rigid and too expensive. The Government must:

• Introduce micro‑apprenticeships for 1–5 person firms

• Fund short, flexible skills bootcamps for digital, green and creative skills

• Provide wage subsidies for small employers taking on young people

• Reform the apprenticeship levy so small firms can actually use it

• Guarantee work experience for every young person

Skills must be practical, employer‑led and easy to access.

Support Young Entrepreneurs and First‑Time Founders

A huge share of young people want to start businesses but the system ignores them. The Government must:

• Create a New Enterprise Allowance 2.0

• Provide startup micro‑grants for young founders

• Offer simple tax guidance for first‑time entrepreneurs

• Expand access to affordable workspace

• Build local youth enterprise networks with real founders

Entrepreneurship must be treated as a valid career path, not a last resort.

Fix the High Street and Local Economies

Small businesses need thriving places, not empty units. The Government must:

• Reform business rates for bricks‑and‑mortar independents

• Incentivise councils to fill empty shops

• Support community ownership of key high‑street assets

• Expand local transport links to boost footfall

• Back local retail, hospitality and cultural businesses

A strong high street means a strong local economy.

Make Regulation Proportionate and Predictable

Small businesses can’t cope with constant rule changes and regulations that are built for big businesses. The Government must:

• Introduce a Small Business Regulatory Test for all new laws

• Provide at least 12‑months’ notice for major regulatory changes

• Create a single compliance dashboard for micro firms

• Reduce reporting burdens for companies with fewer than 20 staff

Regulation must be fair, stable, proportionate and manageable.

Build a Climate‑Resilient Small Business Economy

Heatwaves, storms and supply chain shocks are becoming more frequent and hit small firms hardest. The Government must future proof:

• Fund heatwave adaptation (cooling, insulation, ventilation)

• Support flood‑proofing for vulnerable businesses

• Provide grants for green upgrades

• Help small firms access green supply chains

• Build local resilience plans with small and micro businesses at the centre

Climate resilience is now a business survival issue.

Put Small Businesses at the Heart of Government

Small businesses need to be heard and listened to. They aren’t just a footnote. They need to be given the respect they deserve. Currently the Small Business Minister has a huge portfolio. The Government must:

• Create a more senior Ministerial role solely for Small & Micro Business

• Establish a Small Business Council with real founders rather than small business representative bodies

• Publish a Small and Micro Business Impact Assessment for every Budget

• Hold quarterly Small Business roundtables with the PM and Chancellor

Small and micro business owners must be seen, heard and prioritised.

Follow through on the Promise to End Late Payments Once and For All

Late payments are costing the UK economy £11bn a year and shutting down 38 small businesses at day. The Government has a package of reforms going through parliament. This is a once in a decade chance to end overdue payments and long, extended contractual payment terms, both of which suffocate growth.

The details of the legislation are being worked out as the clauses in the draft legislation are being debated. The Bill must deliver protection for small and micro businesses and Ministers and MPs must not give in to big business interests and lobby groups. Late and long payments damage cashflow. Cashflow is oxygen. Late and long payments strangle growth.

Small and micro business plea:

If the new Labour Government wants to rebuild the UK economy, it must start with the businesses that:

• employ half the private‑sector workforce

• drive innovation

• anchor communities

• train young people

• keep high streets alive

• generate local prosperity and social impact

This manifesto is simple: Back small and micro businesses with proportionate rules simple to understand and comply with instead of one size fits all over regulation, get money to them faster, cut their admin and costs, and the UK will grow. Ignore them, and the UK will continue to stagnate.