Tony Blair must prove early on his historic third term that Labour is committed to supporting small businesses, the backbone of the UK economy.

As Nick Goulding, Chief Executive of the Forum of Private Business, which represents 25,000 small-to-medium sized firms said: “The next five years are going to be extremely tough for small businesses if Labour decides to keep increasing national insurance contributions, the minimum wage and fuel duty.

“Red tape and an extension to maternity rights are also making it harder for business to be flexible and respond to market and consumer demand. If Labour believes in creating a business environment, as it says it does, it must reduce taxation and regulation.”

In parallel with this, the Government must use its third term to improve skills training. “The shortage of vocational skills relevant to the workplace is of critical concern. Business owners are telling us that too many young people are arriving in the workplace from school, college and university who cannot spell or count to a competent level. Labour is right to focus attention on improving skills, but again the proof is in the pudding. Employers will not be patient in waiting for Labour to deliver more young people with vocation skills,” he adds.

Similarly the British Chambers of Commerce has voiced concern following Labour’s victory. “This Government has a reputation for being long on rhetoric and, in a fairly benign economic climate, has got away with it. In fact their confused agenda for business support combined with their record on legislation leads us to question whether they are as business-friendly as they would like to claim.

“On a local basis, we are dismayed at the lack of return Government is getting from the amount of money it is spending. Crime, transport, education and health have all been beneficiaries of their largesse but the impact this has had on the ground is negligible. We will also be watching the performance of the opposition parties, which, of late, has fallen well short of what is needed. With a reduced Government majority they will have no excuse for being ineffective.”

SOURCE: BUSINESS INDEPENDENT