What do businesses have to gain by siding with a political party? » SMEInsider

What do businesses have to gain by siding with a political party?

This week the Daily Telegraph received a letter signed by over 100 large business owners, who publicly condemned Ed Miliband and the Labour party for how they intend to run the country.

Why is it that large businesses feel the need to publicly air their political allegiances?

Within the letter was a scathing condemnation towards the possibility of a Labour-run government, stating that Miliband ‘‘will threaten jobs and deter investment. This would send a negative message about Britain and put the recovery at risk.’’

The letter can be seen as an attempt to undermine Labour’s own policies regarding how all business should be run in the UK. It has been made obvious that large corporations are distancing themselves away from the Labour party, due to their policies on how large businesses should be run.

This week Miliband announced that he proposes to abolish zero-hour contracts. This will give employees the legal right to a regular contract after 12 weeks’ continuous work. The proposal has been met with scepticism by critics, arguing that employees on zero-hour contracts will be sacked by their employers before the deadline is reached.

Miliband has vehemently opposed some big businesses that do not pay taxes. In February the Labour leader launched an attack on pharmaceutical chain Boots, all the while making his views on big businesses known. “I think part of my job is to say: ‘We’re going to stand up to these powerful forces who aren’t paying their taxes, who are avoiding their taxes.’ Because frankly, they have a responsibility,” said Miliband during a live broadcast.

This latest turn of events firmly puts big businesses in the corner of the Conservative Party during the General Election. But why are big businesses making such a public effort to show their political beliefs – and do they represent the wider business community, 99% of which are SMEs?

Corporation tax can be seen to play a huge part in business’ political allegiances. It was revealed last month that one in four of the UK’s largest companies paid no corporation tax at all last year, with nearly half of the FTSE 100 companies not giving substantial evidence to paying tax.

This information essentially fuels the fire for the Labour party to attack leaders of large businesses, as Labour has claimed in the past to be the ‘small business party.’

Labour’s stance was made all the more clear this week when Shadow Chancellor Ed Balls pledged to reverse the coalition government’s final cut in corporation tax to pay for a reduction in rates for small businesses. This will be seen as a very attractive policy for all those connected with SMEs, which could ultimately create a divide between small and large businesses over political allegiances.

What’s more, it is interesting to see that while there have certainly been steps taken to help improve the business environment for SMEs, this has in fact been the work of a coalition government – ultimately, spearheaded by Business Secretary Vince Cable of the Lib Dems. This raises the question: why is credit purely been given to the Conservative government for positive changes to UK business?

The Federation of Small Business was unavailable to comment, but has previously praised the coalition government’s policies to help protect small businesses, such as the Small Business, Employment and Enterprise Act.

Political leaders will surely argue about the future of big and small businesses in the UK tonight, as all seven of Britain’s major parties will deliberate with each other in the first televised debate of the General election.

What are your thoughts on the debate surrounding big and small businesses? Let us know in the comments below.