Emma Jones CBE is calling on Kwasi Kwarteng to signal his support for small business with targeted measures
Emma Jones CBE is the founder and chief executive of small business network and business support provider Enterprise Nation.
She says Chancellor Kwasi Kwarteng must make it clear the Government will support small business…
All eyes will be on the Chancellor on Friday when he delivers what promises to be a seismic ‘fiscal event’, with tax cuts and an historic energy bailout package.
While the Government’s mantra is growth, cuts and bailouts of whatever magnitude aren’t going to deliver the step change in pace and productivity we need to see. What small businesses need is a radical plan for growth.
The Chancellor will be well aware that budgets, even mini ones, have the ability to lay out early promises, set expectations, and the direction of travel.
With more than £30billion in tax cuts mooted, the trajectory for expansion has to be a sharp upwards curve creating the conditions for expansion in both the short and long term.
He will also know that supporting start-ups and small businesses is future proofing the economy. With an increase in costs for all areas of business, this community is most at risk and already struggling to flourish.
The Government must recognise that allowing this to continue unabated is a risk to innovation and the economy.
In this decade of change, including the deeply affecting final farewell to the Queen after seven decades of loving service providing a comforting backdrop of reliable continuity, the Government has the opportunity to not only offer the necessary financial support, but to usher in a new era where small business leaders have the space to grow.
So, in addition to the National Insurance, VAT, Income and Corporation Tax reforms we’re expecting, we’d like to see the Chancellor to consider some of our ideas on what small businesses need for growth to be delivered.
1. Make it clear that the Government backs small businesses
Ruling out an online sales tax at this point could help to demonstrate support for small businesses.
The tax may be directed at large platforms, but an unintended consequence will be that the burden is passed to thousands of small firms using platforms to trade, so increasing the already rocketing cost of doing business.
We’d like to see the Government standing behind businesses as well as households. According to our latest Barometer, 44 per cent of small businesses are now started as a side hustle and operate within the home, putting added pressure on consumer energy bills.
Publishing the long-awaited Entrepreneurship Strategy to recognise the positive surge in start-ups and reflect how government policies in areas from finance to housing can create the positive conditions to start a business from home, would also demonstrate that the Government backs small business.
2. Unleash an export boom
Small businesses have put international trade on hold for too long.
It’s time to get exporting and Go Global, and the government can enable this through re-introducing programmes such as Tradeshow Access and launching Export Vouchers that enable small businesses to get advice from an export specialist with match funding of their own.
Doing this would help to create the culture where overseas expansion is an achievable goal.
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3. Sort out late payment once and for all
Around 65 per cent of invoices to small businesses were paid late in May, according to a study from Intuit, with an average of £22,700 per business outstanding.
The Government must make it easier for the Small Business Commissioner to tackle large businesses that delay payment and make clearer recommendations to small businesses to ensure they invoice with transparent terms and charge interest to those that pay late.
Cash flow is vital for small firms if they are to avoid taking on expensive and unnecessary finance, using to it fund growth.
4. Increase Government spending with small businesses
Our report Access All Areas: Government found that despite the ambition to spend 25 per cent of its procurement budget directly with small firms, the Government has only so far managed to spend 10 per cent.
Leveraging technology by connecting government’s tier one suppliers to suitable sub-contractors would help, but so would removing the red tape that makes access to life-changing contracts disproportionately difficult for small businesses.
It is small and nimble businesses that will inject new ideas and innovation into contracts.
5. Maintain continuity and building skills
It might not sound radical but providing certainty and reliability is vital for the business community.
Chopping and changing business support programmes has become the new normal. It causes confusion and can lead to business owners disengaging as they cannot keep track of the programmes for which they are eligible.
Sometimes maintaining and improving existing initiatives such as Help to Grow which offer access to learning, experienced mentors and digital expertise should be maintained as they have just started to gain traction.
Supporting unemployed people into self-employment could also support the drive to increase the skills small firms need to tap into. Unemployment is expected to rise yet there is no dedicated programme to support a move from unemployment into self-employment since the New Enterprise Allowance scheme was scrapped.
The Department for Work and Pensions should consider reviewing the self-employment targets for the Restart programme, so the focus is re-balanced from finding people jobs to supporting people to create their own.
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