Support Small Businesses and Post Offices, and Address Horizon Scandal
Labour · what the evidence says
An independent, source-checked look at Labour’s policy “Support Small Businesses and Post Offices, and Address Horizon Scandal” — what it would actually do across the things that affect your life. Every claim below quotes the source behind it. How this works.
Prosperity & living standards — Helps
minor · low confidence
The policy targets real drags on small-business productivity — late payments, procurement barriers, and regional finance gaps — that evidence confirms cost the economy billions. But many measures are aspirational or overlap with frameworks already enacted, so the genuinely additional effect on living standards is hard to pin down and likely modest.
The evidence
- Labour will act on late payments, improve export guidance, reform the British Business Bank for regional growth, and reform procurement rules. — labour.org.uk (manifesto) — “Labour will act on late payments for small businesses and the self-employed, improve export guidance, and reform the British Business Bank to better support regional growth. They will also reform procurement rules for go…”
- Late payments are a significant drag: the party cites an estimated £11 billion annual cost to the UK economy and ~38 business closures per day attributed to the problem. — theguardian.com (media) — “Labour party asserts that late payments cost the UK economy an estimated £11 billion annually and contribute to the closure of approximately 38 businesses every day”
- Labour aims to unlock £20 billion in unpaid invoices through new legislation. — labour.org.uk (media) — “By introducing new legislation, Labour aims to unlock £20 billion in unpaid invoices”
- The reforms include granting the Small Business Commissioner enhanced powers to fine persistent late payers and conduct spot checks. — theguardian.com (media) — “The planned reforms include granting the Small Business Commissioner enhanced powers to impose fines on persistent late payers, conduct spot checks, and set deadlines for dispute resolution”
- Despite previous government initiatives, SMEs still face persistent barriers to timely payment, with only a fifth of direct public sector procurement going to SMEs in 2024. — britishchambers.org.uk (media) — “only a fifth of direct procurement spend from the wider public sector went to SMEs in 2024, similar to 2023, indicating a persistent problem that impacts cash flow”
- The Procurement Act 2023, already in force, mandates 30-day payment terms for public sector contracts, meaning some policy ground is already covered. — gov.uk (media) — “The current Procurement Act 2023, already in force, includes a mandate for 30-day payment terms for all public sector contracts, aiming to reduce late payments in this area”
- SMEs make up 99% of UK businesses but secure only about 20% of direct public procurement spending, a figure stagnant since 2019. — cp.catapult.org.uk (media) — “SMEs, despite making up 99% of UK businesses, secure only about 20% of direct public procurement spending, a figure that has remained stagnant since 2019”
- The Procurement Act 2023 already sets departmental targets to deliver over £7.4 billion of public money to small businesses annually by 2028, overlapping with this policy's stated aims. — dwfgroup.com (media) — “The Procurement Act 2023, which came into force in February 2025, already aims to simplify rules and foster SME participation, setting departmental targets to deliver over £7.4 billion of public money to small businesses…”
- The British Business Bank supported 24,000 new businesses in 2024/25, with 84% outside London, contributing an estimated £4.7 billion in additional GVA. — british-business-bank.co.uk (media) — “In 2024/25 alone, the BBB supported 24,000 new businesses, with 84% located outside London, contributing an estimated £4.7 billion in additional Gross Value Added (GVA) and supporting approximately 22,100 jobs across the…”
- Labour intends to explore setting additional KPIs for BBB regional funds, a soft commitment rather than a binding mandate. — labour.org.uk (media) — “Labour intends to explore setting additional Key Performance Indicators (KPIs) for BBB regional funds”
- Labour plans to create a Small Business Export Taskforce with the FSB to simplify exporting. — strongandherd.co.uk (media) — “Labour plans to collaborate with the Federation of Small Businesses (FSB) to create a Small Business Export Taskforce, which will identify practical ways to simplify exporting processes and improve guidance”
Biggest unknown: How much of the stated effect is additional given the Procurement Act 2023 is already in force, and whether soft-verb commitments ('explore', 'improve guidance') are backed by enforceable instruments that actually change firm behaviour at scale.
Our reading: This policy targets several documented drags on small-business productivity and dynamism: late payments costing an estimated £11 billion annually, persistent SME exclusion from public procurement (stuck at ~20% for five years), and regional finance gaps. These are real frictions on firm formation and growth — genuine O13 concerns. The proposed mechanism for late payments (enhanced Small Business Commissioner powers, new legislation to unlock unpaid invoices) is more concrete than typical aspirational language and goes beyond what the Procurement Act 2023 already covers in the private-sector context. The BBB already has a strong regional track record (£4.7bn GVA, 84% of businesses supported outside London in 2024/25), so a stronger mandate could build on a proven vehicle — but the commitment is only to 'explore' additional KPIs, not impose them, which limits confidence. On procurement, the Procurement Act 2023 is already in force with similar SME targets, so the marginal additionality of further reform is genuinely uncertain. Export guidance via a Small Business Export Taskforce is a soft instrument with no committed budget or statutory force in evidence. The Horizon compensation and Post Office banking hubs are less directly relevant to aggregate productivity, though banking access supports SME cash-flow. Overall, the direction is a modest improvement to business dynamism and SME opportunity — real but not transformative — because: the late-payments mechanism is the most concrete and addresses a documented £11bn drag; the procurement and BBB reforms overlap significantly with existing frameworks; and several commitments use exploratory rather than binding language. The counterfactual matters: much of this space is already being addressed by the 2023 Act and existing BBB strategy, so the genuine additional effect on O13 is limited. Confidence is low given reliance on projected figures from the party itself (E2, E3) and the absence of independent modelling of additionality.
Inequality & fair shares — Helps
minor · low confidence
These policies modestly tilt resources toward small businesses, deprived regions, and people harmed by the Horizon scandal — all of which narrows specific dimensions of the inequality gap. But most measures are guidance-level or rely on existing frameworks already in place, so the distributional effect is likely small.
The evidence
- Policy commits to acting on late payments for small businesses and the self-employed — labour.org.uk (manifesto) — “Labour will act on late payments for small businesses and the self-employed”
- Late payments are estimated to cost the UK economy £11 billion annually and contribute to ~38 business closures per day — theguardian.com (media) — “late payments cost the UK economy an estimated £11 billion annually and contribute to the closure of approximately 38 businesses every day”
- Policy aims to reform the British Business Bank to better support regional growth — labour.org.uk (manifesto) — “reform the British Business Bank to better support regional growth”
- In 2024/25, 84% of the BBB's new business support was located outside London — british-business-bank.co.uk (media) — “84% located outside London, contributing an estimated £4.7 billion in additional Gross Value Added (GVA)”
- SMEs make up 99% of UK businesses but secure only about 20% of direct public procurement spending, a share stagnant since 2019 — cp.catapult.org.uk (media) — “SMEs, despite making up 99% of UK businesses, secure only about 20% of direct public procurement spending, a figure that has remained stagnant since 2019”
- The Procurement Act 2023 already targets over £7.4 billion of public money to small businesses annually by 2028 — dwfgroup.com (media) — “setting departmental targets to deliver over £7.4 billion of public money to small businesses annually by 2028”
- Enhanced Small Business Commissioner powers to fine persistent late payers and conduct spot checks are proposed — theguardian.com (media) — “granting the Small Business Commissioner enhanced powers to impose fines on persistent late payers, conduct spot checks, and set deadlines for dispute resolution”
- Despite government initiatives, SMEs have persistently faced barriers to timely payments — nao.org.uk (institutional) — “despite government initiatives, SMEs still face barriers in securing timely payments”
- Policy commits to swift justice and compensation for sub-postmasters affected by the Horizon IT scandal — labour.org.uk (manifesto) — “ensure swift justice and compensation for sub-postmasters affected by the Horizon IT scandal”
- £1.44 billion has been paid to over 11,300 claimants across redress schemes as of January 2026 — committees.parliament.uk (government) — “approximately £1.44 billion has been paid to over 11,300 claimants across the Horizon Shortfall Scheme (HSS), Group Litigation Order (GLO) scheme, and Horizon Convictions Redress Scheme (HCRS)”
- Parliamentary committees have identified serious structural failings in the redress system including unacceptable delays and inadequate offers — committees.parliament.uk (government) — “parliamentary committees, such as the Business and Trade Committee, have identified "serious structural failings" in the redress system, citing unacceptable delays, inadequate offers”
- Banking hubs and strengthening of the Post Office network are committed, targeting areas that have lost bank branches — moneyweek.com (media) — “Labour party has pledged to establish "at least" 350 banking hubs over the next five years, prioritizing areas that have lost high street bank branches”
- Citizens Advice has underscored the Post Office's importance for vulnerable groups and rural residents — publications.parliament.uk (government) — “Citizens Advice, as the statutory watchdog for the Post Office, has underscored its importance for vulnerable groups and rural residents who rely on face-to-face transactions”
Biggest unknown: Whether late-payment enforcement and procurement reforms will materially shift cash flow to small/micro firms, or remain as difficult to enforce as previous initiatives have been.
Our reading: O14 asks whether the gap between the richest and the rest narrows. This policy bundle addresses several dimensions: (1) Late payment reform directly targets a wealth transfer from large firms (which delay payment) to small firms and the self-employed (who disproportionately suffer cash flow harm). The scale of the problem — £11bn annually and ~38 closures per day — is real, but past government initiatives have repeatedly failed to move the dial, and the proposed enforcement mechanism (enhanced Commissioner powers, a new Fair Payment Code) has precedent in earlier codes that achieved limited penetration. The Procurement Act 2023 already contains 30-day payment terms. The marginal gain from this policy is uncertain but plausible. (2) The BBB regional reform and procurement changes would, if effective, shift capital and contract income toward SMEs in deprived regions outside London — reducing both business-size inequality and regional inequality. The BBB already directs 84% of its support outside London, so the marginal regional shift from adding KPIs is likely modest. Procurement reform faces a stagnant baseline (20% SME share unchanged since 2019 despite prior reform). (3) Banking hubs help low-income, rural, and elderly people who rely on face-to-face banking — narrowing an access inequality. (4) Horizon compensation directly addresses a historical wealth destruction visited on a small, mostly non-wealthy group; accelerating it narrows a specific injustice. However, parliamentary scrutiny shows structural failings persist. Taken together, these measures lean toward narrowing inequality in income, regional distribution, and access — but most are guidance-level or overlap with existing legislation. The direction is 'improves' but the magnitude is minor, with low-to-moderate confidence that delivery will materially shift aggregate inequality indicators.
Good work & fair pay — Helps
moderate · moderate confidence
This policy tackles late payments, widens small business access to government contracts and finance, and commits to compensating Horizon scandal victims — all of which would improve pay security and job quality for self-employed people and small business workers. The main caveat is that several measures build on existing initiatives, and delivery gaps remain.
The evidence
- Labour will act on late payments for small businesses and the self-employed — labour.org.uk (manifesto) — “Labour will act on late payments for small businesses and the self-employed”
- Late payments are estimated to cost the UK economy £11 billion annually and close around 38 businesses per day — theguardian.com (media) — “late payments cost the UK economy an estimated £11 billion annually and contribute to the closure of approximately 38 businesses every day”
- New legislation is projected to unlock £20 billion in unpaid invoices for small businesses — labour.org.uk (media) — “Labour aims to unlock £20 billion in unpaid invoices”
- The Small Business Commissioner would gain enhanced powers to fine persistent late payers and conduct spot checks — theguardian.com (media) — “granting the Small Business Commissioner enhanced powers to impose fines on persistent late payers, conduct spot checks, and set deadlines for dispute resolution”
- SMEs make up 99% of UK businesses but secure only about 20% of direct public procurement spending, a share stagnant since 2019 — cp.catapult.org.uk (media) — “SMEs, despite making up 99% of UK businesses, secure only about 20% of direct public procurement spending, a figure that has remained stagnant since 2019”
- Central government's direct spend with SMEs was only 11% (£6.9 billion) in 2024 — britishchambers.org.uk (media) — “central government's direct spend with SMEs was only 11% (£6.9 billion) in 2024”
- Labour will reform procurement rules to simplify bidding processes and cut red tape for SMEs — accountsandlegal.co.uk (media) — “Labour's proposed changes aim to reverse this trend by simplifying bidding processes and cutting red tape”
- The existing Procurement Act 2023 already sets departmental targets to deliver over £7.4 billion to small businesses annually by 2028 — dwfgroup.com (media) — “The Procurement Act 2023, which came into force in February 2025, already aims to simplify rules and foster SME participation, setting departmental targets to deliver over £7.4 billion of public money to small businesses…”
- Labour will reform the British Business Bank to better support regional growth — labour.org.uk (manifesto) — “reform the British Business Bank to better support regional growth”
- In 2024/25 the BBB supported 24,000 new businesses with 84% outside London, contributing an estimated £4.7 billion in additional GVA and around 22,100 jobs — british-business-bank.co.uk (media) — “In 2024/25 alone, the BBB supported 24,000 new businesses, with 84% located outside London, contributing an estimated £4.7 billion in additional Gross Value Added (GVA) and supporting approximately 22,100 jobs across the…”
- Labour will ensure swift justice and compensation for sub-postmasters affected by the Horizon IT scandal — labour.org.uk (manifesto) — “ensure swift justice and compensation for sub-postmasters affected by the Horizon IT scandal”
- As of January 2026, approximately £1.44 billion has been paid to over 11,300 claimants across Horizon redress schemes — committees.parliament.uk (government) — “approximately £1.44 billion has been paid to over 11,300 claimants across the Horizon Shortfall Scheme (HSS), Group Litigation Order (GLO) scheme, and Horizon Convictions Redress Scheme (HCRS)”
- Parliamentary committees have identified serious structural failings in the redress system, citing unacceptable delays and inadequate offers — committees.parliament.uk (government) — “parliamentary committees, such as the Business and Trade Committee, have identified "serious structural failings" in the redress system, citing unacceptable delays, inadequate offers, and processes that "re-traumatise" v…”
Biggest unknown: Whether new enforcement powers for the Small Business Commissioner and reformed procurement rules actually shift behaviour, given that similar past initiatives left SME procurement shares stagnant.
Our reading: This policy bundle targets several well-documented barriers to fair pay and job security for the self-employed and small business workers. Late payments are a concrete threat to cash flow and business survival: the evidence shows billions in unpaid invoices and dozens of business closures daily. Giving the Small Business Commissioner real enforcement teeth — fines, spot checks, binding deadlines — goes beyond previous soft-touch codes and could materially improve income security for the self-employed. The projected £20 billion unlock is a Labour figure and should be treated cautiously, but even a fraction of that would be significant. On procurement, the gap between stated ambition and measurable reality is stark: SMEs get only 11% of central government direct spend despite being 99% of businesses. Labour's simplification measures are directionally right, but the Procurement Act 2023 already set similar goals with limited movement so far, making delivery the key uncertainty. The BBB reforms build on a bank already delivering tens of thousands of jobs outside London; a stronger regional mandate could extend that, though the incremental gain over business-as-usual is unclear. For sub-postmasters, compensation already underway represents real redress for people who lost livelihoods — a direct O4 improvement — but parliamentary scrutiny confirms the process remains slow and inadequate in places, so the stated commitment to 'swift justice' is not yet matched by delivery. Taken together, the policy would improve conditions for self-employed people and small business workers if implemented effectively. The measures are targeted at real, documented problems. But several overlap with existing legislation, and enforcement capacity and political will to override large-firm interests are the deciding variables.
Equal treatment & democratic rights — Helps
moderate · moderate confidence
The policy's most direct relevance to O9 is its commitment to justice and compensation for sub-postmasters wrongly convicted under the Horizon scandal — a major due process failure. Significant progress has been made but parliamentary committees have identified serious structural failings and ongoing delays that undermine the 'swift' justice pledge.
The evidence
- The policy commits to ensuring swift justice and compensation for sub-postmasters affected by the Horizon IT scandal. — labour.org.uk (manifesto) — “ensure swift justice and compensation for sub-postmasters affected by the Horizon IT scandal”
- As of January 2026, approximately £1.44 billion has been paid to over 11,300 claimants across the Horizon redress schemes. — committees.parliament.uk (government) — “approximately £1.44 billion has been paid to over 11,300 claimants across the Horizon Shortfall Scheme (HSS), Group Litigation Order (GLO) scheme, and Horizon Convictions Redress Scheme (HCRS)”
- Parliamentary committees have identified serious structural failings in the redress system, including unacceptable delays and processes that re-traumatise victims. — committees.parliament.uk (government) — “parliamentary committees, such as the Business and Trade Committee, have identified "serious structural failings" in the redress system, citing unacceptable delays, inadequate offers, and processes that "re-traumatise" v…”
- There are concerns about an unknown number of unsafe convictions linked to pre-Horizon systems, with calls for urgent legislation to quash them. — committees.parliament.uk (government) — “potentially unknown number of unsafe convictions, including those linked to pre-Horizon IT systems like "Capture," with calls for urgent legislation to quash these”
- The total cost of redress is estimated at around £2 billion, and Fujitsu has not yet contributed despite acknowledging a moral obligation. — committees.parliament.uk (government) — “The total cost of redress is estimated to be around £2 billion, yet Fujitsu, the system's provider, has not yet contributed to this bill, despite acknowledging a moral obligation”
- A new redress scheme for close family members affected by the scandal is anticipated to open in summer 2026. — gov.uk (media) — “A new redress scheme for close family members affected by the scandal is anticipated to open in summer 2026”
Biggest unknown: Whether the remaining compensation claims will be settled promptly and fully, and whether unsafe convictions linked to pre-Horizon systems like 'Capture' will be quashed — if these stall, the due-process improvement is partial at best.
Our reading: O9 is concerned with due process, rule of law, and equal treatment. The Horizon IT scandal is one of the most significant due-process failures in modern UK history: hundreds of sub-postmasters were wrongly convicted, many losing livelihoods, liberty, and in some cases their lives. The policy's stated commitment to swift justice and compensation directly addresses a rule-of-law and equal-treatment deficit. The evidence shows real progress — £1.44bn paid to over 11,300 claimants — which is a material, measurable improvement in the due-process position of a wronged minority. However, parliamentary committees have found serious structural failings: delays, inadequate offers, and processes that re-traumatise victims. There are also unresolved issues around unsafe convictions from pre-Horizon systems, and Fujitsu has not contributed financially despite a moral obligation. The remaining small-business and procurement elements of this policy are economic levers with no direct O9 mechanism; they do not affect equal treatment or due process in any traceable way and are therefore excluded from this verdict. On balance, the direction is 'improves' because the commitment to redress a major due-process injustice is real and partially delivered — but the magnitude is only moderate and confidence is moderate, because the 'swift justice' element is clearly incomplete and the structural failings are well-evidenced by credible parliamentary sources.