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SMEs: 'Government doesn't understand us'

London, UK (26/11/2010)

Management Today (LONDON) A survey has shown almost three quarters of businesses feel misunderstood by the Government. Nothing's changed, then...

They might be frequently cited during speeches as ‘drivers of the economy’, but a new report has shown that when it comes down to the nitty gritty, small businesses feel the Government doesn’t understand them. According to a survey from insurance company Simply Business, 73% of businesses don’t feel that the Coalition government gets what their needs are. Although, given that it’s just announced small business rate relief will henceforth be automatic, it might be beginning to head in the right direction…

Despite what it says, we’re not sure this is necessarily Coalition-specific, though. The survey also asked businesses about their main concerns, and they turned out to be pretty similar to comparable surveys taken during the Labour government. According to the results, business’ top five worries are winning new business, cashflow, the cost of compliance, increased running costs, and bank lending. In fact, the only point that we wouldn’t have seen during Gordon Brown’s reign of terror was concerns about VAT, which is set to rise to 20% at the beginning of January. So while this Government isn’t doing much to address business’ concerns, it’s not doing much worse than its predecessor.

Which is, of course, an indicator that not much has changed. And businesses  probably weren’t much encouraged much by a report by McKinsey earlier this week, which said one of the best ways to drive growth was for the Government to court multinationals and ignore innovative sectors like green energy, focusing instead on industries we’re good at. Like, presumably, finance. Just what SMEs need.

That said, there’s been a bit of a turn-up for business’ books (literally, in fact), in the form of the Localism Bill. Local government minister Eric Pickles has said that the Bill, which is due to be published ‘imminently’ (his words, not ours), will include measures to ensure small business rate relief is applied automatically. For businesses with premises under £12,000, the relief will automatically deduct 0.7p from the 41.4p in the Pound they already pay. While the relief is actually already available, at the moment, businesses need to jump through a few bureaucratic hoops before it can be applied. Under the new system, an estimated 500,000 firms could benefit. So that’s at least one bit of Governmental consolation…

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