When David Cameron said he wanted to be the voice of the ‘great ignored’ a few weeks ago, we’re not sure he was really talking about SMEs. But according to a survey by accountancy firm Haines Watts, those running owner-managed businesses don’t believe the various initiatives introduced by the Government to help them through recession have actually done much good. Politicians are always banging on about their support for the small business sector – not surprisingly, since everyone is agreed on its importance, and lots of voters work in it. But this suggests that either they’re not putting their money where their mouth is, or they’re going about it the wrong way…
The Haines Watts survey suggests that small business owners can be pencilled in just below Rochdale grandmothers on Dave’s list of persons ignored – because they think Labour’s support measures have been a ‘waste of time’. Just 14% felt the VAT reduction (the Treasury’s key fiscal boost) was of any use to their business, while a measly 2% had taken up the energy efficiency loans on offer from the Carbon Trust. Respondents were similarly scathing about the Department for Business, Innovation and Skills’ attempts to do… well, anything. Just 11% of businesses though the measures on offer from BIAS have been helpful.
Banks were, inevitably, another point of conflict. Despite the well-publicised Enterprise Finance Guarantee scheme, which aims to persuade banks to lend by offering Treasury guarantees for business loans, a quarter of businesses complain their banks are still asking them to provide personal guarantees. In fact, there seems to be a sense that most business policies implemented by the Government have focused on big business: few SMEs stand to benefit from Carbon Trust measures, while the EFG has been notoriously hard to get hold of.
The key issue for many of these firms, insists Haines Watts, is cashflow (42% said they’d had problems on that front). So in the interests of balance, it’s worth pointing out the success of Alistair Darling’s Time to Pay scheme, which allows struggling businesses to defer their tax payments; not to mention the tax breaks he’s extended to sustainable energy businesses.
On the other hand, respondents are now worried about the negative impact of potential increases to income tax, corporation tax, and national insurance. And even if this survey suggests that Labour’s much-vaunted measures to support SMEs haven’t quite had the desired effect, the state of the public finances probably means that tax hikes are inevitable no matter who wins today.
In today's bulletin:
EU warns of UK Greek tragedy as Brits go to the polls
Morrisons hammered despite 6% sales growth
Dyson quits M&S to take (very) hot seat at Punch
John Vincent: Empty companies
Small business owners among the great ignored?