SMEs still lacking confidence (in Government)

The Coalition's efforts to endear itself to small businesses don't seem to be having the desired effect...

by Emma Haslett
Last Updated: 06 Nov 2012
The latest data on the public finances might have been moderately encouraging, but the Government's economic policy still doesn't seem to be filling SMEs with confidence. A survey by accounting software company Sage has found that just a third of the UK's small firms are feeling more positive about the business outlook than they were this time last year. And the consensus was that a lack of support from the Government is a big part of the problem....

Sage surveyed nearly 6,500 small businesses across the UK, Germany, France, Canada and the US. Of the 1,510 from these shores, 34% were feeling more optimistic - the lowest proportion of any of the five countries surveyed (the overall average was 41%). Another 37% said nothing had really changed in the last 12 months.

We imagine the Government would have been hoping for a rather higher figure. But David Cameron’s promises to slash red tape (like the much-vaunted ‘one in, one out’ rule for new legislation) don't really seem to be cutting it with small firms: 63% said the Coalition should be doing more to cut bureaucracy. Around half think it should focus more on cutting tax, while 40% want it to put more pressure on the banks to boost lending. And a mere 22% think it's providing enough support and advice for people starting a business.

As you'd expect, such muted confidence levels translate into a less-than-encouraging employment outlook for the next year. A paltry 14% say they’re planning to recruit new employees (second only to the US, where at 13%), while 16% say they’re actually expecting to make redundancies, or at the very least, stop recruiting (second only to – you guessed it - the US).

Still, it wasn't all doom and gloom as far as the Government was concerned. Almost half of the UK's small firms think the economy is recovering; in fact, they were actually more complimentary about the Coalition's handling of the economy than their counterparts overseas. They also spoke highly of Britain's favourable business culture and entrepreneurial spirit. So all is not lost - but the sooner that red tape bonfire starts, the better.

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