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Big test for Corbynomics; Start-up slump

Terry smiling headIt was described as the longest suicide note in history with its list of left wing policy statements. That was Labour leader Michael Foot’s manifesto in 1983 which plunged his party into long years in the wilderness.

Is the party repeating the same pledge and facing a similar prospect?

Jeremy Corbyn has never made a secret of his leanings and, far from frightening the voters he believes they will command popular support.

There are certainly elements in the leaked manifesto that would be well-received: nationalising the railways was never top of the public’s sell-off list. Selling Royal Mail also divided opinion. Few people love the privatised energy companies.

Corbynites will remind us that under state control the East Coast Main Line was profitable and that the only beneficiaries of privatising Britain’s energy companies have been the foreign companies that now own most of it.

More police? More nurses? No one can oppose such measures.

He has spoken previously of a freeze rates for small businesses, a clamp down on corporate tax avoidance and investing in skilled workers. Even the business community would back these plans.

His “Better Business” plan published two years ago was not so much an attempt to asset strip Britain’s boardrooms as a promise to “level the playing field” between small and big business.

He also wants to create the conditions that would allow business to grow: mainly by ensuring Britain has the infrastructure that business needs.

Mr Corbyn will insist his plans are costed, including a commitment to a £10 minimum wage and a cap on energy prices.

But raising taxes? Ah, every voter wants better public services, greater fairness. No one wants to pay for them and this could be the Achilles heel in Mr Corbyn’s desire to “transform” Britain.

A previous Labour leader, Harold Wilson, spoke of the “pound in your pocket”, knowing that votes are won by making people feel better off. Mr Corbyn has four weeks to convince the electorate that they won’t get stung by his plans.

Start-up slump

New data on start-ups shows a fairly steep dip across the UK which will come as a surprise and a disappointment to all those driving the entrepreneurial agenda.

Edinburgh created 8.4% fewer companies in the first quarter and Dundee 11.4%, according to figures from financial information firm DueDil.

Blaming Brexit, as one suggests, looks to be wide of the mark. If that were the case the decline would be consistent across the country, whereas the figures show some locations are still adding to their stock of companies.

Glasgow has seen a 2.5% increase in start-ups. Salford in Greater Manchester witnessed an astonishing increase of 85.5%. No Brexit worries there.

Furthermore, the data follows analysis by Bank of Scotland earlier this year which found that company start-up numbers have fallen by 19% across the UK and by 3% in Scotland over the last five years – which pre-dates the Brexit decision.

So if Brexit is not cause of the decline, what is?

In Edinburgh’s case it is puzzling and perhaps even a little embarrassing as it was named UK Entrepreneurial City of the Year for 2016.

There has been no change in government policy, no withdrawal of support. Indeed, the range of support has barely been greater and all the banks have given a commitment to help small firms.

However, the banks and the government agencies are not particularly receptive to start-ups. The banks aren’t interested unless the company already has a steady income stream, and try getting a helping hand from Scottish Enterprise unless you want to export (few start-ups are at that stage), or want help with social media and marketing.

There again, these factors do not explain the variation in the data.

Start-up trends can be influenced by employment prospects in the wider economy. A healthy jobs market can be as much a deterrent to going-it-along as a poor market.

Job security and a good regular income is not an incentive to take a risk. So Edinburgh’s buoyant economy with almost full employment could be a reason for the slowing in self-employment.

 

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