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Michael Fallon’s big quest for business

Lots of rhetoric from business minister, Michael Fallon over the last couple of years. In theory, it will all be music to the ears of SMEs, many of whom have formed a somewhat jaundiced view of Vince Cable’s activities.

Fallon’s appointment as business minister fits hand in glove with Cameron’s CBI speech, claiming to understand the needs of British business. Cameron has campaigned on the principle that business and SMEs in particular are the only ones who can save the economy, and given that many are somewhat disenchanted with the battles they are facing on the government’s behalf, he would like to convince us that he is absolutely on our side.

Cameron re-pledged to reform education, and turn out the ?brightest graduates and school leavers?. He was also hailing the success of the Academy’s projects, and suggested this should be extended to primary school level. Many business people -myself among them – feel that education is failing this country post-primary level, in an obsession with successful statistics, annihilating the student’s responsibility to think for themselves and thus becoming positive contributors to business.

Nick Clegg’s election promise on red tape of one in, one out (I always did find it worrying that, talking about business, he could not see that plus one minus one offered up a big fat zero) is being overhauled into a positive by the BIS. Personally, I have yet to notice any red tape disappearing off my business and am horribly aware of the huge implications in re-training and supervising the gargantuan changes that PAYE Real Time will hit us all with next April. 

There are other implications too in these changes. Like many other SMEs, we use casual labour for emergency cover or peak periods and the onus of immediate and accurate paperwork on this makes it something to avoid if we feasibly can. For businesses smaller than us, many have told me they will simply find it impossible to do.

Fallon, who claims he is ?re-lighting the bonfire of regulations”, is said to be keeping a spare bottle of lighter fuel for the more extremist measures of the Beecroft report, with the no-fault-dismissal principle at the centre. I would love this one to happen. Him succeeding in it, I sincerely doubt. I would be happier to see a principle he might win with, that of encouraging employment by cuts on employers’ national insurance, especially to long term unemployed.

Another fire Mr Fallon is trying to re-kindle is business” support on the Prompt Payment Code. In the four years since this was established, only just over a thousand companies have signed up to it. He plans to follow up letters to all of the FTSE 100 and FTSE 250 asking them to join, with a plan to name and shame those who fail to co-operate at the end of the year. I am somewhat worried by the approach of reprimand on anyone failing to co-operate with something supposedly voluntary. Some rather nasty historical figures with similar approaches spring to mind. 

There’s little doubt that SMEs are indeed suffering from longer and longer payment chains and that large companies wielding their power to fail to pay are a huge part of the problem. I would much rather see something done about the legal system with an ability to enforce collections in a speedy and efficient manner, rather than have to wait for that increasingly overburdened train. The treasury’s rather pathetic little booklet “Get Paid!” doesn’t help either, stating obvious guidelines that the majority of right minded business people already know.

I would also rather see something done about the banks who are still not lending. Their chief executive has angered many with his comments that SMEs lack a demand for finance. Given the general stories of lack of success, combined with approval timescales that due to centralized decision making take too long to be of relevant use, it’s no wonder less businesses bother to apply. Interest rates, as Cameron is keen to point out, have indeed remained low. Not much use when business can’t borrow.

Yet again, we have fine vote appealing oratory to listen to. Will either Cameron or Fallon actually deliver to business” Time will tell – but I won’t hold my breath.

Jan Cavelle is founder of the Jan Cavelle Furniture Company.

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