Reflecting on this year’s Budget, a panel of small businesses gathered recently at a roundtable event to share their views and insights on what impact the announcement could have on their businesses, and how the government might strengthen its support for SMEs around the country.
Overall sentiment of the group was one of frustration. There was a feeling among the people in the room that Osborne’s clear intent to produce a pro-business Budget had achieved positive headlines and resulted in mildly positive measures, but that it would struggle to practically help the UK’s SMEs because it wasn’t bold enough and didn’t help immediately.
So, what of Osborne’s much vaunted “jobs tax” cut – will it really stimulate growth by enabling small firms to hike up their recruitment? The policy was certainly a welcome boost for very small businesses but, realistically, one that is more likely to enhance the balance sheet than actively encourage recruitment given the size of the incentive. The introduction of R&D tax credits was another example. The panel felt it was a pro-business measure that was too long term to have much practical, immediate impact for SMEs – and one that only helped certain sectors (such as technology) rather than companies across the board.
Access to funding – particularly overdrafts and loans from banks – also remains a hot topic, and something these businesses felt wasn’t adequately addressed in the Budget. This, despite recent data from the Bank of England suggesting part of the issue lies in demand, rather than supply. The group also talked at length about the growing influence of alternative sources of finance such as crowdfunding. Arpita Dutt, who recently founded employment law firm Brahams Dutt Badrick French LLP, commented: “Getting traditional funding which does not put you and your family at risk when starting a business is a huge challenge. The whole process needs to be simplified for startups, otherwise people may fall at the first hurdle.”
So, what can the government do now?
Revealing their hopes for the future, it was unanimously agreed that perhaps the ultimate nod to small businesses would be immediate business rates relief for startups, to help their cash flow and allow them to keep their business alive. Significantly, these firms agreed the current economic landscape is such that the small business community wants – and, indeed, needs – a supportive and interventionist government in order to flourish. In return, there is a strong belief that smaller companies and startups could play a key role in economic recovery.
This Budget offered positives for the UK’s small businesses – perhaps more so than for any other community – and was also one that will contribute to making Britain a better place to do business. Importantly though, Osborne may have missed the most important trick of all: unlike larger corporations with strong credit ratings and cashflow reserves to fall back on, the reality for many SME owners lies in the here and now – planning for the short to medium term. “To encourage business growth this year, the Government needed to implement measures that help businesses now, not in 2014,” said Crispin Reed, Senior Consultant at The Career Practice.
And so, what remains is certainly a “Budget for Business”; just not for right now.
Alan Pepper is the chief executive at Avanta Managed Offices, a provider of flexible office space, meeting rooms and support for growing businesses.
Share this story