Given the importance of small and medium companies to the country, it is surprising that the Chancellor did not do more to help these existing companies, and those who are on the point of setting up new businesses. These are the companies which will pull the country out of recession. The Chancellor did bring Corporation tax down to 22% in 2014, with an objective of 20% in the longer term. However, there was no corresponding reduction in the small business corporation tax, which is presently at 20%. Surely an objective should be established of reducing this to 15%?
Thursday, 22 March 2012
There is still not enough help for small businesses in the UK
There are about 4.8 million small and medium size companies in the United Kingdom, companies whose turnover do not exceed £50 million and whose profits do not exceed £300,000. To give you an idea of the importance of this type of company to the overall economy, they provide 80% of the jobs in the country and their total turnover exceeds all the companies in the Footsie 100, the stock market index of the top 100 companies on the London Stock Exchange.
Small businesses complain that they do not have access to lending, at competitive rates in a non bureaucratic manner. Although the Chancellor did set up a National Loan Guarantee Scheme for £20 billion, this is not enough. He should supplement this with a series of Regional funds, which are allocated central Government monies, and set up through Regional Credit Committees through the local Chambers of Commerce. These should be set up with the help of successful local businessmen who are willing to commit their time and energy to helping other businesses. All the major cities should be allocated their own funds which could also lend money to start ups under the right conditions. Angel networks could also be brought in to enable rich private individuals to invest their money in interesting start-ups.
We should also be training our businessmen to become the best trained businessmen in the world, regardless of whether they went to university, business school or college. After all, it is no use business people setting up a business, and not knowing how to manage it properly. We should set up regional training centres which can provide free courses for those setting up or even those already running existing companies. This would then ensure that they have the best skills for the serious job of setting up their companies and making them a success. We can then set about pulling the country out of recession and creating a dynamic and thriving business community.
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