All this swap and change is bad for SMEs

SMEs face uncertainty.

Last week I sat for an hour or so with a couple of entrepreneurs. They have both founded more than one business and are both heavily involved in helping to promote the UK’s start-up and small business economy, one through Start-up Britain and the other through Young Brits and the G20 Young Entrepreneurs’ Alliance. As often happens when you talk to entrepreneurs, the discussion turned to the relationship between government and business and the role government plays in promoting a better environment for those running a business. Both were clear that the UK has a long and noble tradition of an economy built on small business, with several references during the conversation to Napoleon’s description of a "nation of shopkeepers".

The consensus, as it often is, was that government’s role is to create the conditions for start-ups and existing businesses to grow and thrive and then get out of the way and let them get on with it. "We need an end to this constant political need to announce new initiatives," said Alex Mitchell, co-founder of Young Brits. In short, both wanted a bit less government. In fairness, the stated ambition of most politicians for the last 20 years (and maybe longer) has been reducing red tape. This chimes well with entrepreneurs, but all the talking has hardly resulted in less regulation. The current government has made a lot of its commitment to red-tape reduction. It has appointed two "entrepreneurs in residence" at BIS, launched a Red Tape Challenge and promised that all new legislation will be introduced on a "one-in, one-out" basis.

It was interesting last week to see a number of legislative announcements within a few days of each other, all purporting to make life easier for those running businesses. At least two of them will impose new reporting requirements on some or all listed companies. What’s given with one hand in terms of easing the burden on businesses seems bound to be whipped away with the other.

The Enterprise and Regulatory Reform Act is intended to make life easier for those running small businesses and in large part it has been welcomed as achieving that by those it aims to help. But as is often the case, simplification is complicated and the new rules and regulations surrounding areas such as settlement agreements will require entrepreneurs to put in time and effort to understand them. In the long-term there may be benefits for those running SMEs, but in the short term the time pressures may increase. The entrepreneurs last week were clear the best red tape reduction policy of all would be for the government to just stop doing things. A moratorium on any new policy announcements would be the best initiative.

Less welcome in some quarters (judging by reactions to our story on it) was the announcement of changes to the Companies Act requiring listed companies to divulge information in their annual reports on subjects such as diversity (giving the breakdown of the number of men and women on their board, in senior management positions and across the company as a whole), the company’s greenhouse gas emissions and human rights, as well as a new strategic report that focuses on the business model, strategy and risks to replace the existing business report. Even those who welcomed some of these changes (partly out of desire to see this narrative part of company reports be more useful) reacted negatively to the tight timetable imposed, with the changes due to come into force from 1 October, 2013.

Elsewhere, the EU was also trumpeting simplification while adding in a degree of complexity for some companies. The abolition of mandatory quarterly reporting was welcomed by most, but the requirement for country-by-country reporting in certain sectors was less welcomed by those affected, although it will please those keen to see greater transparency in reporting. The new accounting framework also reduces reporting requirements on small and micro businesses, although the category of micro business is a new addition to the regulations.

These are just some of the recent changes announced and all from last week. The net result of all this change is uncertainty. One thing that those at the sharp end, running businesses, talk about is the need for greater certainty. The confidence to invest in their businesses, which is ultimately what will be behind any sustained economic recovery, depends on it. Perhaps it is time for the politicians to leave business to just get on running and growing their businesses.

This piece first appeared on economia.

Photograph: Getty Images

Richard Cree is the Editor of Economia.

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Andy Burnham and Sadiq Khan are both slippery self-mythologisers – so why do we rate one more than the other?

Their obsessions with their childhoods have both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

Andy Burnham is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s widely seen as an unprincipled flip-flopper.

Sadiq Khan is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s the hugely popular mayor of London, the voice of those who’d be proud to think of themselves as the metropolitan liberal elite, and is even talked of as a possible future leader of the Labour party.

Oh, and also they were both born in 1970. So that’s a thing they have in common, too.

Why it is this approach to politics should have worked so much better for the mayor of London than the would-be mayor of Manchester is something I’ve been trying to work out for a while. There are definite parallels between Burnham’s attempts to present himself as a normal northern bloke who likes normal things like football, and Sadiq’s endless reminders that he’s a sarf London geezer whose dad drove a bus. They’ve both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

And yes, Burnham apparent tendency to switch sides, on everything from NHS privatisation to the 2015 welfare vote to the leadership of Jeremy Corbyn, has given him a reputation for slipperiness. But Sadiq’s core campaign pledge was to freeze London transport fares; everyone said it was nonsense, and true to form it was, and you’d be hard pressed to find an observer who thought this an atypical lapse on the mayor’s part. (Khan, too, has switched sides on the matter of Jeremy Corbyn.)

 And yet, he seems to get away with this, in a way that Burnham doesn’t. His low-level duplicity is factored in, and it’s hard to judge him for it because, well, it’s just what he’s like, isn’t it? For a long time, the Tory leadership’s line on London’s last mayor was “Boris is Boris”, meaning, look, we don’t trust him either, but what you gonna do? Well: Sadiq is Sadiq.

Even the names we refer to them by suggest that one of these two guys is viewed very differently from the other. I’ve instinctively slipped into referring to the mayor of London by his first name: he’s always Sadiq, not Khan, just as his predecessors were Boris and Ken. But, despite Eoin Clarke’s brief attempt to promote his 2015 leadership campaign with a twitter feed called “Labour Andy”, Burnham is still Burnham: formal, not familiar. 

I’ve a few theories to explain all this, though I’ve no idea which is correct. For a while I’ve assumed it’s about sincerity. When Sadiq Khan mentions his dad’s bus for the 257th time in a day, he does it with a wink to the audience, making a crack about the fact he won’t stop going on about it. That way, the message gets through to the punters at home who are only half listening, but the bored lobby hacks who’ve heard this routine two dozen times before feel they’re in the joke.

Burnham, it seems to me, lacks this lightness of touch: when he won’t stop banging on about the fact he grew up in the north, it feels uncomfortably like he means it. And to take yourself seriously in politics is sometimes to invite others to make jokes at your expense.

Then again, perhaps the problem is that Burnham isn’t quite sincere enough. Sadiq Khan genuinely is the son of a bus-driving immigrant: he may keep going on about it, but it is at least true. Burnham’s “just a northern lad” narrative is true, too, but excludes some crucial facts: that he went to Cambridge, and was working in Parliament aged 24. Perhaps that shouldn’t change how we interpret his story; but I fear, nonetheless, it does.

Maybe that’s not it, though: maybe I’m just another London media snob. Because Burnham did grow up at the disadvantaged end of the country, a region where, for too many people, chasing opportunities means leaving. The idea London is a city where the son of a bus driver can become mayor flatters our metropolitan self-image; the idea that a northerner who wants to build a career in politics has to head south at the earliest opportunity does the opposite. 

So if we roll our eyes when Burnham talks about the north, perhaps that reflects badly on us, not him: the opposite of northern chippiness is southern snobbery.

There’s one last possibility for why we may rate Sadiq Khan more highly than Andy Burnham: Sadiq Khan won. We can titter a little at the jokes and the fibs but he is, nonetheless, mayor of London. Andy Burnham is just the bloke who lost two Labour leadership campaigns.

At least – for now. In six weeks time, he’s highly likely to the first mayor of Greater Manchester. Slipperiness is not the worst quality in a mayor; and so much of the job will be about banging the drum for the city, and the region, that Burnham’s tendency to wear his northernness on his sleeve will be a positive boon.

Sadiq Khan’s stature has grown because the fact he became London’s mayor seems to say something, about the kind of city London is and the kind we want it to be. Perhaps, after May, Andy Burnham can do the same for the north – and the north can do the same for Andy Burnham.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.