The shadow chief secretary to the treasury has asserted the Labour party is “incredibly pro-business”.
Peter Dowd, MP for Bootle, made the comments following a roundtable discussion with SMEs in Manchester as part of a tour to hear how northern businesses are addressing productivity issues and to address the support a potential future Labour government could provide.
Mr Dowd said the party’s pro-business stance was why a potential future Labour government would want to invest in rail infrastructure, businesses, education services, universities, early years as well as primary, secondary and further education.
He said: “That’s part of the support network and that underpins the private sector and its ability to do its job."
Mr Dowd said Labour's pro-business position did not compromise its commitment to working people and employees as an “important part of the success of a business in a way is how well its staff are treated”.
He said: “What we’re trying to do is just perfectly reasonable and a lot of other countries do it, such as the Germans, the French, the Italians, the Swedes, the Danes.
“It’s just getting balance there, it’s about the conditions and terms and conditions of people working and the wages they get, against the needs of business and vice versa.”
Mr Dowd said the series of talks with businesses in the north was a “productivity tour” with the aim of talking about how to increase productivity.
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He said: “It’s always in the context of the fact that our productivity is about 35 per cent less than the Germans, about 20-odd per cent less than the French, less than Italians, so our productivity rates tend to be less than our major competitors.
“How do we ensure that those productivity levels move upwards which of course leads to better growth, more sustainable growth in the economy?
“We’re trying to get the views of SMEs, universities, business, local authorities’ economic development units, so a group of people who have different views and opinions, as to what the hindrances are to them being more productive as a business.”
“A country with this level of economic disparity is going nowhere”
Mr Dowd said the tour focused on the business productivity in the north because the regional imbalance between the north and south is “quite remarkable”.
“Investment into the north compared to London in transport is huge," he said. "It’s about £2,500 per person down there and in the north west it’s £600 per person, which is the second best, so the gap between the north west and the south east is almost £2000.
“In the north east, spending on transport is about £200 a year, so the disparity is huge in terms of the northern and southern economies.
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“A country with that level of disparity economically is going nowhere, it’s in danger of having really a significant north-south divide and there has to be an equity in investment in the country, whether that be public investment or a private investment for that matter.”
Mr Dowd said investment was particularly significant to the level of productivity in the north, which was an issue before the EU referendum.
He said: “Interestingly enough, we really didn’t touch on what a no-deal Brexit will mean for SMEs because what we were trying to do was say even before Brexit, this was a substantial problem.
“We’ve had this problem with lower productivity in the north for decades.
“As important as Brexit is, and the uncertainty and complication it adds, the fundamental issue for decades has been this lack of investment in the north in one fashion or another whether that be in transport, digital, investment in smaller businesses in skills in training.”
However, Mr Dowd said businesses were “fearful of investing” during a period of economic uncertainty.
“People are inevitably fearful of investing into something where they’re not quite sure whether they’re going to get a rate of return on their investment.”
£250bn for regional banks
Mr Dowd said Labour has proposed a £250bn national transformation fund over a 10-year period to invest in infrastructure, particularly and green infrastructure, to support the regions.
He also said proposals include investment into regional banks “with £250bn and private investment coming into that as well, to focus on those areas which are not getting investment from the usual routes...and give them a security through a state-owned regional bank”.
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He said: “Investment is the key, investment into education services, so proposals in relation to a national education service with a localised focus is important.
“Andy Burnham’s been doing a great job in Greater Manchester in bringing things together and you can see Manchester is better for it.
“There’s no reason why that wouldn’t be able to work in other parts of the country, so there’s an issue of London and Whitehall in effect trying to control everything, centralise everything, have its fingers in pies all over the place that it’s not able to do very well.”