By Ian Baxter, Founder of Baxter Freight
Pick up a newspaper, switch on the TV or browse social media and it doesn’t take long to find news about large multi-national businesses. I get it, they’re important. But in total large corporates employ fewer people and do less business than the small and medium sized enterprises (SMEs) in the UK whose voices are seldom heard.
Being smaller and mostly owner-managed SMEs are more entrepreneurial, flexible and innovative than their bigger competitors. Because they’re smaller they can’t exercise undue influence on their market and they’re not constrained by any limits on market share so inevitably have more potential for growth and job creation. Because they’re British based, these jobs are much more likely to stay in the UK and any profits are much more readily taxable here.
As an SME businessman, I’m calling on all parties to address the following points in the forthcoming election.
1.Stop helping large companies get bigger!
If you want to develop a more diverse economy focus Government procurement, tax policy, legal architecture and grant incentives on helping smaller companies get bigger not on bigger companies growing further. Come down hard on aggressive tax avoidance that means we have to pay taxes while some of our competitors do not.
The heads of large companies get “face-time” with ministers. SMEs do not. Let’s set up a national council of SMEs to meet with ministers on a monthly basis to re-dress the balance and increase dialogue with small businesses.
3.Money, money, money
SMEs are struggling to access the debt financing they could in the past so we need different options including venture capital, crowd funding, small capital listings, and seed capital. Extending and enhancing the EIS and SEIS investment tax relief schemes is one example of how Government can help.
4.Ditch the poll tax for companies:
Almost everyone now agrees that business rates are a pernicious form of tax. When I started Baxter Freight I’d had a £40,000 rates bill before I’d sent out the first invoice to a customer! Business rates have helped decimate the high street and are a major obstacle for small businesses. They either need scrapping altogether or substantially reforming so that new and small businesses get a fairer deal.
5.Back to work!
There are 4.9m million businesses in the UK and about 750,000 unemployed 16-24 year olds. Let’s do a deal where instead of paying benefits to them you pay the same amount as a subsidy to our companies for a fixed period and get these people into productive work helping SMEs. Apprenticeships are important but not every job requires that form of training.
6.Reading, writing and ‘rithmetic:
When young people come to us they need to be ready for work. Most of them don’t need degrees in astro-physics but they absolutely do need good skills in maths and English and to be confident communicators. Can schools focus on areas like commercial awareness as well as softer communication skills?
7.Who wants to be a millionaire:
We need to teach young people that being an entrepreneur is a great thing to do with their life. Not only does it give them a chance to make money it’s one of the most challenging and personally rewarding careers they can have. Yet it’s not the career of choice for most youngsters. Business graduates mostly end up in big companies. If we want to help create new businesses this needs to change.
8.Tax doesn’t have to be taxing:
Simple taxes are more collectable and much easier for us to administer and understand. An over-bearing state stops this happening and that’s got to change.
Why is every planning decision so slow? The Coalition has relaxed some rules but we’d all benefit if things happened quicker. I’d like to see more progress on developing our national infrastructure in the areas of road, rail and airports as well as mobile phone and broadband services.
10.All we need is trade:
We need to recapture our position as the greatest trading nation on earth. The next Government must push hard for early agreement of the EU-US free trade agreement (Transatlantic Trade and Investment Partnership) so that UK SMEs can get free access to the world’s largest free trade bloc. We need to make the case for free trade with as many countries as we can including numerous Commonwealth nations.
It’s no exaggeration to say that our future success as a nation depends on the future success of our SMEs. It is that success that will drive the growth in our country that we desperately need to pay off our national debt and to pay for our schools and hospitals. So I’d argue it’s vital that all parties start listening more to what SMEs have to say.