The cost of living and business were the key themes that dominated this weeks Labour conference in Brighton as the Party looked to set out its stall in the countdown to the next General Election.
Both featured in the Ed Miliband’s leader’s speech as he sought to strike a balance between providing solutions to the rising cost of living as well as the rising costs of doing business. The difficulty will be in policy areas where those conflict.
The cost of living encompasses many of the Party’s key policy areas, the benefit loss that stems from any superfluous bedrooms, the minimum wage, energy prices and of course, the current headlines around zero hour contracts.
The impact on business
At first glance there is a lot here that can impact on business. It may well be argued that since 2010 the minimum wage has decreased in real terms, but the truth is over a longer period (in fact since its introduction in the 1990s) it has increased at far above inflation, so there is a strong argument that that the recent below inflation increases are correcting the balance.
However, it’s likely to hold little sway with senior Labour figures, so the Forum for Private Business will argue a strong case for tax reductions in offset any increase in minimum wage that may come from a Labour Government. That may be in the form of lower employers’ National Insurance, or a freeze on employers’ pension contributions, but it is important that any recovery isn’t choked by excessive wage rises at the first sight of a green shoot.
Zero hour contracts remain a trickier area. We continue to point out their importance and relevance to smaller businesses and for all the grandstanding we know that sensible policy makers believe the real issue around these contracts lies not with small businesses, but the overuse of them by bigger businesses. Our focus will be on preventing any government from chucking out the baby with the bathwater.
Above all, we will remain committed to demonstrating to all politicians that businesses, as much as consumers, are feeling the pain of rising prices, not least in the energy and property rates areas. If one can ease the cost pressures faced there, the benefits can then run down to employees, but we have to make sure we have the wealth providing businesses of this country able to compete, locally, nationally and globally, before we start heaving further cost pressures upon them.
What do you think of the proposals? Let us know in the comments below. Plus, there’s still time to have your say on the cost of doing business in our latest survey.