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The Lib Dems: In search of new voters (part 2)

By Angela Harbutt
October 13th, 2011 at 4:38 pm | 1 Comment | Posted in Liberal Democrats

A couple of weeks ago I suggested here on this blog that the Lib Dems were the natural party of small business (The Lib Dems: In search of new voters…) and that with about 23million people working in small and medium sized businesses, they were a pretty attractive voting sector to pursue.

A study out today provides us with another damn good reason why the Lib Dems really should think about its relationship with small businesses – they disproportionately employ vulnerable people – making them both economically and socially important.

The IEA report Self-employment, Small Firms and Enterprise, by Peter Urwin, says that

…small businesses provide vital opportunities for those who often struggle to find work in the rest of the labour market – those with no or few qualifications, immigrants, women with domestic responsibilities and those with poor English language skills. There is therefore not only an important economic, but also a social dimension to ensure the government is not holding back this sector.

…11% of employees of small firms had no qualifications, compared with 4% of employees of large firms.

…Only 8% of people working in large companies had a language problem, whereas in companies with less than ten employees this is 18%.”

That’s pretty compelling stuff .

So what to do ?

Well , consider the IEA’s conclusions….

At a time when Britain’s economy requires thriving businesses, this research shows that complex regulation such as employment protection legislation and costs such as National Insurance prevent the self-employed from taking on employees.

There is therefore an increasing tendency for people to be self-employed without employees or to work for larger companies that are better able to cope with the costs of regulation. In short, there are too many barriers preventing people from moving from self-employment to becoming employers of small numbers of people and this affects vulnerable groups in the labour market.”

My advice to the policy makers within the Liberal Democrats is not only take note of the importance of small business. But to to embrace the IEA’s recommendations to help support this important sector.

I won’t go into all the  IEA’s recommendations here (go read for yourself) but essentially it argues for government  to lift the regulatory burden on businesses that is currently preventing many self-employed people from developing their businesses and employing people.

All of this would not only demonstrate the Liberal Democrat’s commitment to” the small and the local” (see previous post) – but is also a real strategy for growth and employment.

Sounds like a win-win to me.

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