Comment: The burden on small businesses needs action now
Lord Young’s appointment as enterprise tsar is to be welcomed, but cuts in regulation and red tape cannot come soon enough for small businesses.
By John Walker
As we hear time and time again, small businesses truly are the backbone of our economy employing 60 per cent of the private sector workforce and providing 50 per cent of UK GDP, yet they are continually burdened by regulation and ill placed policy.
So the appointment of Lord Young as enterprise tsar is welcome news for the 4.8 million small firms as he understands their needs – he is avidly against red tape, one of the biggest bugbears for any business.
Lord Young’s commitments to really help small businesses through the recovery period and help new start-ups must be turned into action now. Improving access to finance for small firms is critical and the plans to extend the Enterprise Finance Guarantee for four more years to 6,000 businesses will be welcome news for those small firms that cannot get a ‘yes’ from their bank.
Continuing the commitment to ensure 25 per cent of all government contracts are awarded to small and medium sized enterprises must be followed through. The introduction of the simplified and standardised pre-qualification questionnaire, which the Federation of Small Businesses (FSB), campaigned for, will really help those small firms looking to bid for such contracts.
Late payment is a major issue for our members at the FSB. Our research shows that local government is likely to pay one in four invoices late, and central government and government agencies make one in three payments late. Small businesses rely on receiving payments within the timescale agreed to maintain cash-flow to ensure the business can run on a day-to-day basis. So again, it is good news that government has pledged to pay on time.
It is also vital that our budding entrepreneurs are supported and encouraged to go it alone. The new Enterprise Allowance Scheme, which the FSB has been calling for throughout the downturn, will provide access to mentors and small loans to really help these future enterprises thrive and prosper.
While these measures from Lord Young look promising, small businesses do not have the time to wait for them to be put in place. They need action now so they can help to rebuild the economy.
John Walker is national chairman of the Federation of Small Businesses.
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