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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Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

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