ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Now then, one of the key votes in any election is of course the business vote and with the election just over two years away, Labour are battling to get the business vote on side. Are they winning? Well let’s find out from the Shadow Business Secretary, Chuka Umunna, very good to see you Mr Umunna.

CHUKA UMUNNA: Good morning, it’s very good to be here.

DM: Business, it’s a difficult issue for Labour because presumably you’re not going to get as cosy this time as the last Labour administration did.

CU: I think the interesting thing is with this coming general election that the face of business is changing. If you look at say the Conservative party and how traditionally they have measured their support amongst business, it is usually how many FTSE 100 CEOs can you get round for a kitchen supper with the party leader.

DM: But just on that, Gordon Brown and Ed Balls and Tony Blair weren’t averse to that when Labour were in power.

CU: Well what I’d say now is that I actually think business is changing. One of the things, we had a big event for our Entrepreneurs Network in Tech City this week and one of the things I committed to doing … well first of all I apologised and I apologised for using the shorthand SME, small and medium sized enterprises, because people often lump together a whole group of businesses which are very varied and very different into that category and talk about them as if they are some homogenous thing when actually if you look at business now it’s changing. You’ve got people who perhaps maybe haven’t set up a business yet, I call them the aspirants who would love to set up a business but can’t yet, you’ve got the traders, white van man, your plumber, your local shop keeper who we know and love very much because we rely on them, if our boiler breaks down we’ll go to them, if we want a pint a milk at all hours of the day we’ll go round the corner. You’ve got your lifers – now this is a really interesting group in the sense that these are people who are increasingly starting up their own business to manage their affairs perhaps around caring responsibilities or it may be that they have a particular hobby or talent but we’ve seen some figures come out this week about the numbers of people who are becoming self-employed, 40% of the new jobs in this parliament so far are in the self-employed space because the employment market has been so difficult. Then you’ve got your entrepreneurs and many people in the tech space, self-definers, entrepreneurs, people doing their business through the web but what I’m saying is, these aren’t mutually exclusive categories and it’s not exhaustive but if we want to win the support of business, we’ve got to acknowledge their differences and absolutely focus on their needs.

DM: It’s interesting, isn’t it, you’re going in at the grass roots level but what about the bigger businesses, still the engine room of the British economy, is the message from Labour going to be toned down a bit because they’ve been told their bonuses are too big, they don’t have any corporate responsibility, they’re going to pay more tax presumably if you reinstate the top rate of tax and on it goes. The message from Labour has been unremittingly strident towards them, are you going to do more to try and win them back?

CU: Look, I absolutely disagree that somehow we’ve had some strident message against all of those big businesses, I simply don’t accept that but what I do want, we do want to get the support of business, large and small …

DM: So how are you going to get large businesses, you’ve explained the small ones?

CU: Just a moment, the other thing is that we want the support of businesses in all parts of the country. Now we’re in many respects best placed to do that because we do have representation in all different parts of the country, Wales, Scotland …

DM: But the question is about big business, what are you going to do to attract them? Are you going to support these cuts in corporation tax that the Chancellor has outlined?

CU: I’ve said and I think one of the starting points for large business is a) they want to see a certain policy environment which gives them the confidence to invest and that’s why so many of them have been deeply worried about the government’s position in respect of the European Union and secondly, they do want to see us acknowledge where we do agree on things so there is some degree of consensus. Now …

DM: Well do you agree with cutting Corporation Tax?

CU: On the cuts on Corporation Tax, I’ve been very positive about that, on their cuts to Capital Allowances … sorry, on their increases in Capital Allowances, I’d agree with that too but particularly what the larger businesses have been talking to me about is actually how do we develop an active government approach in respect of the private sector, i.e. an industrial strategy and that is something we have been absolutely four square behind. It’s one of the reasons for example that we have been advocating for a long time now a British investment bank to help power these industrial strategies that we need to ensure that we can pay our way in the world. We’ve got to work with the different leading sectors, automotive is a good example of where you can see positive effects of government working in partnership with that sector to grow automotive so it’s delivering not just more jobs but really good quality in this country to meet the demands of …

DM: Can I just pick up on one of those point, about the European Union. First of all Labour’s reaction to what has been widely hailed I suppose as something as a triumph by the Prime Minister, difficult budget negotiations anyway last week. What’s Labour going to do about any vote on it?

CU: Well look, it’s very welcome that an agreement was reached. If an agreement wasn’t reached you would have seen it automatically going up and I’d argue actually that by voting against a budget increase we actually strengthened his hand at the negotiating table but look, we argued for a cut, we voted for a cut and we anticipate supporting this agreement subject to …voting for this agreement in the House of Commons of course subject to seeing the small print which we haven’t seen yet.

DM: But Labour did say he had isolated himself, the Prime Minister, with his referendum speech, that he had no friends in Europe, that he didn’t really have a cat in hell’s chance of doing it. Are you going to eat a bit of humble pie about what he came back with?

CU: As I said, look, I said it’s welcome, I think we strengthened his hand before he went into those negotiations and the really important thing is this, I mean firstly it shows that it is possible to achieve change and reform in the European Union. The eurosceptic people in his party would argue this thing’s a basket case, you can’t reform it, it can’t change, well that thoroughly has been rebutted by what happened. Secondly, the really important thing is that we see Europe reorientated toward growth and that’s the reform agenda that we’ve been arguing. We want to see for example a new growth commissioner, we want to see an end to some of the waste, this absurdity of having the European Parliament sitting in two places which is absolutely ridiculous, why not use that money that you spend having two places, why not use that to get growth going again in Europe? That must be the priority. I think the British people, why people in the main support Europe is because they think it is good for our economy. We’ve got millions of jobs that depend on it but that must be the focus.

DM: Okay, that’s an issue that is going to play in the Eastleigh by-election. Let me ask you about that, is this an opportunity for Labour to sit back and watch the coalition partners knock ten bells out of each other or do you seriously think that you, Labour, could win the Eastleigh by-election?

CU: Well look far from it, and far be it from us to make any presumptions about the result but Labour is in that by-election to win it. We’re the only people who are speaking against what the government is doing, let’s remember that both the Liberal Democrats and the Conservatives who are fighting that by-election are responsible for the 4,000 odd families in Eastleigh, in work families who are suffering from the benefit cuts, this is impacting on over 7,000 children in Eastleigh. We’ve seen there are what, over a thousand people out of work in Eastleigh, long term unemployment has gone up there and that is a result of both Conservative and Liberal Democrat policy and the only party capable of standing up and putting forward a proper alternative to get growth going again and solving the problems that the people in Eastleigh see, is the Labour party.

DM: But you are going to have that question put to you on the streets in Eastleigh, in the television studios, okay you’re saying you’re the alternative but what is the alternative when it comes to spending? You will borrow more initially to protect those benefits you talked about and to try to spark growth?

CU: Well the absolute priority is to get demand going, to get growth going again. Remember, our economy did not grow in 2012 and since the comprehensive spending review, I’d say to the people of Eastleigh, look what’s happened to the economy. Here it’s grown by 0.4% compared to growth of 4.2% in the US. Why has the US grown more strongly? Because they’ve focused on growth, getting people into work, because ultimately that is how you reduce your borrowing in the medium to long term. That’s why we want to reduce VAT for the shops and the traders in Eastleigh, that is why we want to give a National Insurance break to micro businesses taking on extra workers in Eastleigh, that is why we want to get infrastructure spending going because at the end of the day it gets the economy moving again, which gets people in work, so that’s more people paying tax, less people who we are having to pay benefits to, increased corporation tax receipts. That is how you reduce your borrowing and we have not seen that happen under this government. Remember, debt is increasing.

DM: Mr Umunna, thank you very much indeed.

CU: A pleasure.