Small businesses to be front of the queue for government contracts if Labour elected

Labour will prioritise Britain’s small businesses for government contracts, Jonathan Reynolds has pledged.

At least one small or medium sized (SME) firm will be shortlisted for “every appropriate contract”, the shadow business secretary said, as he vowed to “back British” commerce.

Speaking in Essex this morning, as he unveiled Labour’s Plan for Small Business, Reynolds told firms: “We know that government itself ought to be a better customer to small business.

“Labour will ensure a fairer shot at public tendering for small business.. guaranteeing at least one SME is shortlisted for every appropriate contract.”

He told the Essex Chamber of Commerce, in Basildon, that if elected, Sir Keir Starmer’s party would work to “provide you with the platform you need to succeed”.

Reynolds added: “It is my absolute conviction that the major economic issues before us – low investment, poor productivity, and low growth – can only be fixed with a better relationship between government and the private sector.”

“Businesses tell me, what they want from the government is stability, certainty and ambition and we just haven’t had much of that. With Labour you will have policy clarity and certainty that works in investment cycles.”

The strategy comes ahead of ex-Tory adviser Iain Anderson, who joined Labour earlier this year to work on business relations, launching his own work on better corporate partnerships, expected early next year.

It also follows shadow chancellor Rachel Reeves announcing the infrastructure council which would advise a Labour government on private investment into public projects.

What are Labour planning?

Policies include setting up a “permanent and independent” industrial strategy council, with SME representatives; reforming business rates to “reward expansion” and making them “market responsive”; a new export taskforce with the Federation of Small Businesses (FSB); a Green Prosperity Plan for energy; and boosting skills via technical excellence colleges.

The training centres, Labour says, will be linked to local industry to “match the skills needs of an area”, while long-term capital access will be boosted alongside tackling late payments – which Chancellor Jeremy Hunt also announced in the Autumn Statement.

“Labour’s plans would go further, faster,” Reynolds said, “with new legislation to ensure all large companies have to report on payment practices and demonstrate they are prompt”.

Councils would be given powers to transform empty high street premises; while “dedicated” police patrols would help address the rise in shoplifting, he added.

Tina McKenzie, policy chair for Federation of Small Businesses (FSB), said the renewed commitment to tackle late payments is welcomed moving forward into the election.

“It is beyond wrong that so many small businesses and self-employed people are having to wait endlessly to be paid for the work they have done,” she added.

“This sad state of affairs causes enormous harm to the UK economy and prevents the investment needed to drive growth in future.”

Daniel Woolf, head of policy at small business support platform Enterprise Nation, said the pledge “cannot come soon enough”.

He added: “While the government’s recent Autumn Statement included welcome steps around prompt payment, we need to see far bolder, wider-reaching action on this issue.

“We’d like to see Labour give consideration to the Dutch government’s 30-day mandate between larger and smaller firms.