I have been involved with the SME sector; (with emphasis on the S part) for almost 25 years and have always felt that generally, the small business in particular gets somewhat of a raw deal from government. On the one hand, they are saddled with the responsibilities of new legislation brought in because of the indiscretions of larger businesses, (Enron etc) and on the other hand, they bear the brunt of tax initiatives which were largely introduced to tackle far bigger businesses.
I have always felt that the exemptions available to the small business from the multitude of rules and regulations were far too few. The whole money laundering legislation environment that we now operate in hits small professional firms very hard yet you still find terrorists, criminals and general purveyors of white collar crime being able to open a bank account.
In the case of taxation, the recent debacle over capital gains tax taper relief which hit the smaller business hardest was actually brought in to target private equity organisations.
It has always been my view that small business doesn’t really have a voice in parliament and its no coincidence that none of the government really have any experience in running a small business.
Gordon Brown’s latest attempt to stimulate this area of the economy focuses on the launch of a “national enterprise academy” supported by Peter Jones, the entrepreneur and panellist on the Dragon’s Den TV programme. The launch due today is aimed at creating a culture of enterprise in the UK with particular emphasis on women run firms. Initiatives to address this will include more funding for start ups by women and an advertising campaign aimed at encouraging female entrepreneurs. Further initiatives, funding and maybe even tax breaks are to be announced in tomorrow’s budget.
I am watching this from the sidelines with a certain amount of cynicism. Remember this is the same government that whilst supposedly encouraging an enterprise culture, hits the small business man with various changes to the tax legislation, the latest of which attacking “income shifting”, strikes at the route of how small businesses have traditionally operated. Nevertheless, I am keeping my powder dry to see what is included in these new enterprise culture proposals.
My overall feeling however, is that the imposition of an “enterprise culture” by government is akin to giving out flags to all supporters at a football match to create an atmosphere. An enterprise culture can’t just be built. It’s almost in the blood. We have to create an environment where people want to take risks, build something from scratch, dream of success for the sake of success itself and not just to get rich quick. The American enterprise culture has taken decades to develop and was largely driven by immigration from various continents in the late 19th and early 20th century.
I still applaud the government doing anything for the small business sector, and as I say, we need to see what’s really included, but if you are really going to encourage and create an entrepreneurial society, you have to create some form of hunger and desire. How that is done I am not sure, but maybe more initiatives at schools, such as The Young Enterprise Organisation, might help.
Anyway, I will have more to say on this subject in due course.