They say you realise who your friends are in tough times. In the case of the chancellor of the exchequer, the UK’s small businesses have been a amicable travelling companion for the Treasury on the journey through the recent economic wasteland.
And, to take the analogy further, it’s also good to show your friends appreciation for a good turn or two they may have done you along the way.
I think George Osborne has been a good friend to small business in the last seven years or so and, in return, SMEs have had the chance to survive, maintain workforces, cut out some of the red tape and, ultimately, increase revenues – which meant a greater tax-take for the chancellor.
According to new numbers unveiled by business secretary Vince Cable, there has been a significant growth in the number of new private businesses in the UK – a clear demonstration that the right environment for enterprise has been created by the chancellor.
At the start of this year there were 5.2 million private sector businesses, which is up 330,000 from a year earlier and the first time this country has ever breached the five million mark.
Most significantly, of those businesses, 99.9 per cent are SMEs, which account for 60 percent of employment and 47 per cent of turnover.
Therefore, now is not the time to take the effort out of the relationship George Osborne has with SMEs. He should not go back to pandering to big business; he should however remember the efforts of SMEs during the recession and in the subsequent months since.
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It would be easy to start eroding away the incentives and tax breaks that were introduced to stimulate small businesses under the illusion they are not needed anymore.
In fact, we need them just as much now because it’s not about survival anymore; it’s about real tangible growth.
It’s about growth that can be sustained and provide a platform for businesses to flourish, take on more people, and train them too – to have the confidence to invest in their infrastructure and in new opportunities and most importantly create a future workforce that can maintain the momentum we are trying to build in post-recession Britain.
I’d be pleased if the speculation that small companies will get some relief on their business rates comes to fruition and hopefully the drop in the cost of a barrel of oil will be seen as a virtual tax cut leaving businesses and motorists with lower prices at the pump.
I’d also like to see the chancellor impress on the big businesses, which are likely to be responsible for the expected huge UK road infrastructure investment, the importance of utilising the country’s SMEs businesses in their supply chains so it’s not only the 0.1 per cent that benefit from government spending.
It is said that SMEs are the backbone of the UK economy. If that’s the case, then the chancellor has to ensure that he continues to build the muscles around the backbone otherwise it will wither and fail to keep the economy upright.
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