With only five days to go until polling day, I have been ploughing through the four Welsh political parties’ economic manifestos for the Assembly elections to examine what each is specifically promising the small firm sector in Wales if elected.
Let’s first look at what Wales’ largest party has to offer.
The opening line in Labour’s manifesto on the economy states that “Wales faces significant economic challenges and the next Assembly term will be a critical period for the Welsh economy”. Not many could argue with that statement, especially as Wales remains the poorest region of the UK.
Yet, the rest of the manifesto on the economy, especially for the small firm sector, remains a major disappointment.
To me, the biggest regret is that the Welsh Labour Party ignores the overwhelming evidence that it is SMEs (small to medium sized enterprises) that create jobs in the economy. Instead, they argue that “much of the economic base of Wales is founded on large companies”.
This is despite Welsh Assembly Government statistics showing that, during the period 2003-2010, 70 per cent of all employment growth in Wales (68,000 jobs) came from SMEs.
Instead of helping SMEs, Welsh Labour has promised to focus their economic policy on large firms and “to build strong links with our anchor companies and develop strategic, mutually supportive relationships with these key companies”.
The only sop to the critically vital SME sector is that they will “review what entrepreneurial support is needed by start-up and small firms, with real potential to thrive and grow, and how we can embed an entrepreneurial culture in Wales”.
Anyone involved in business will groan inwardly at this, given that every Assembly Government since 1999 has undertaken some sort of expensive ‘review’ of business support for smaller firms. Indeed, the last Assembly Government, through its consultation for the Economic Renewal Programme, spent a small fortune on a review of small business support.
Given that Labour has promised, if elected, to put delivery before anything else for the next five years, is it really suggesting that Welsh SMEs need another review that will no doubt take many months to complete and come up with yet another useless strategic document?
Let’s move onto Plaid Cymru.
The biggest surprise in its manifesto for the economy is that the word “entrepreneur” does not feature once in what is otherwise a well-written document. However, there are some new ideas that do merit praise and could help the small firm sector considerably.
With small firms struggling to get access to capital, a new £90m loan scheme is promised, although the manifesto fails to indicate how this differs from the current £150m Jeremie scheme managed by Finance Wales.
In addition, Plaid addresses the issue of public procurement directly and will aim increase the amount of goods and services purchased from Welsh-based suppliers from 50% to 75%. This is long overdue within the Welsh public sector and if they achieve that aim and focus on introducing procurement models that will benefit more small firms, then an additional £1billion of funding will reach Welsh business every year.
However, it is the omission of a particular policy that caught my eye.
At the last election, Plaid Cymru’s economic policy promised to take 50,000 businesses out of paying business rates altogether. Four years later, this has merely been reduced to maintaining the existing level of business-rate relief for businesses in Wales, which suggests that the Party of Wales’ previous zeal for reducing taxes for small firms has been diluted considerably.
For the Liberal Democrats, the main economic policy manifesto promise seems to be the creation of a “Jobs and Growth Innovation Programme” which will include increasing the number of patents, establishing business mentoring schemes and upgrading old manufacturing sites for new jobs, although there is little detail on how this will specifically support the SME sector.
What is to be welcomed though is their commitment to establishing a Welsh Stock Exchange to give businesses greater access to capital. This has long been championed by the Liberal Democrats as a way for growth SMEs in Wales to access capital and is an idea that is worth considering by the next Assembly Government.
What is most striking about the Welsh Conservative manifesto, given the party’s previous ambivalence to devolution, is the commitment to use the Assembly’s new powers to develop a new Enterprise Wales bill.
This will abolish business rates for small businesses; reform procurement to make more contracts SME friendly; provide incentives for enterprise such as scholarships, greater scientific and technical training, R & D support and Enterprise Zones; and will compel WAG to publish a five yearly Enterprise and Entrepreneurship Strategy.
Whilst a number of the ideas in the manifesto are not new, they have yet to be implemented properly in Wales by successive governments. Certainly, a revival of a new Entrepreneurship Action Plan, as suggested, could hail a renaissance in entrepreneurial activity within the Welsh economy if implemented properly.
So there we have it.
Three of the manifestos are committed to developing detailed policies to revitalise the small firm sector in Wales whilst one, contrary to all the evidence, commits to predominantly supporting large companies to drive forward the Welsh economy.
My biggest disappointment in all the party’s manifestos is that there is no real “big idea” to transform the fortunes of the Welsh economy. For example, I had expected at least one of the parties to put forward a radical policy, such as making the case to reduce corporation tax for Welsh businesses as is currently being considered in Northern Ireland.
Certainly, given that Wales has remained at the bottom of the UK prosperity league table since devolution began in 1999, we need the fourth Assembly Government to be radical and innovative and, regardless of its political colours, to pull out all the stops to ensure that our economy gets back on track.
After twelve years of a declining economy, Welsh business expects no less.