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Your support makes all the difference.Almost a year since we launched our Get Britain Trading campaign there remains a real need to help small businesses create jobs and drive growth. The campaign has allowed the Forum of Private Business to raise awareness of the vital role SMEs play in the UK’s economic health, and the importance of removing the barriers that stand in their way.
It calls for enterprise policies to free up finance, simplify the tax system, create employment opportunities and improve education and skills and create opportunities for growth at home and abroad.
There have been some steps in the right direction. Lending from leading banks is still not easily accessible or affordable, but the new Project Merlin appeals process is overturning 40 per cent of applications originally deemed unfit for approval.
Alternative sources of credit are slowly emerging. Alongside new, innovative funding platforms even some traditional lenders appear to be stepping up to the plate.
However, the amounts are relatively small and stimulating competition is crucial. While plans for tax breaks to encourage venture capitalists are welcome, business owners overwhelmingly prefer borrowing at interest to sacrificing equity. Private lenders should also be given tax incentives so they can drive competition within the financial markets and boost the confidence of entrepreneurs disillusioned with banks.
Cash is key, yet firms are waiting longer to be paid. The total amount of outstanding invoice payments now stands at more than £33 billion, according to the payment body Bacs. The fast-tracking of an EU Directive to standardise 30-day payments is positive but it is high time for more substantial measures. For example, as part of our campaign we are calling for the public procurement process to be used to promote prompt payment best practice.
To make matters worse, costs, particularly energy bills, are rising. Many firms face another harsh winter under the shadow of steep price increases, unfair back-billing and miss-selling by large energy companies and unscrupulous brokers.
Over-regulation and disproportionate taxation remain perennial bugbears of small firms. Our research shows red tape leaves them with almost £17 billion per year in compliance costs.
Following HMRC’s new and largely inflexible record check regime, tax is now their top regulatory burden, followed by employment law.
Amid criticisms from some employer groups, serious discussions about reforming enforcement and compliance procedures are an absolute necessity, particularly for micro businesses with fewer than 10 staff, which are expected to drive employment. It is important to say loudly and clearly that small businesses need to be freed to create jobs in the first place.
We are surveying our members to discover their hopes, fears and expectations for 2012 in order to update the Get Britain Trading campaign in the New Year. Visit www.fpb.org for more information.
Phil Orford is chief executive of the Forum of Private Business
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