Will new Prime Minister deliver for SMEs?

posted by 7 years ago in Features

As David Cameron leaves 10 Downing Street today to make way for new Prime Minister Theresa May we take a look at the promises he made to small businesses and the expectations that now rest on his former Home Secretary’s shoulders.

It’s fair to say that when Mr. Cameron announced the Conservative small business manifesto in April 2015 he couldn’t have predicted the fate of the nation. Polls on whether Brexit would go ahead fluctuated even in the final hours leading up to the vote. However, whatever the roller coaster of events and whoever is now the driver, the expectations of small businesses in the country remain high and, many would argue, there are promises that need to be kept.

The manifesto included:

  • A target to cut red tape by £10bn in the next parliament

This pledge was recently branded as “pretty much worthless” by the Institute of Directors as an official audit report found that the target “misses the point” by not actually cutting costs for companies. A report published in May this year by the Federation of Small Businesses claimed that Britain’s small business owners are spending 33 hours a month on business administration. That amounts to four days every month! There have also been serious objections raised about the new quarterly tax returns system. 100,000 people signed a petition opposing the process that’s now under review.

  • A review of business rates, to help high street businesses

The review came when, in George Osborne’s budget, it was announced that 600,000 small businesses will pay no rates and 250,000 will have their rates cut from April 2017. This was a move that was praised by many small business owners and branded by George Osborne as ‘a budget for small businesses’.

  • A pledge to treble number of start-up loans given out in the next parliament, up to 75,000

As it stands Start Up Loans has lent £220 million to 38,000 businesses since it was set up in 2012. The government has set a ceiling of 40 per cent of loans being in arrears since the scheme lends to riskier borrowers – the default rate is currently high at 35 per cent. It’s been predicted that the number of applications will grow following Brexit, however, that said, those running the scheme will have to get their skates on if they’re to meet the target!

  • Establishing a new Small Business Conciliation service to mediate in disputes, especially over late payment

That service has now been altered and will consist of a small business commissioner instead to help small businesses with late payments from clients. This role is still yet to be filled. An all-party parliamentary group (APPG) for entrepreneurship was launched by the Business secretary Sajid Javid MP just last month. The expectation is that the new group will form a bridge of communication between entrepreneurs and the government. The four key areas to be focused on are enterprise education, exporting, tax reform and female founders. With the Brexit decision that might be a bigger job than expected!

  • A pledge to deliver 3 million new apprenticeships over the next five years

Prime minister David Cameron said:

“The greatest asset any employer has is their workforce. And by investing in them, they are investing in the success and future of their business. As a one nation government, we are committed to supporting 3m quality apprenticeships over the next five years – to help strengthen our economy, deliver the skills that employers need and give millions more hardworking people financial security and a brighter future.”

In January this year the government announced members of an Apprenticeship Delivery Board to help meet the target. However, with an apprenticeship levy scheduled for April 2017 it’ll be interesting to see how that affects the figures.

So, it would seem that luggage and furniture are not the only baggage Theresa May will be taking with her into number 10!

Commenting on her appointment, Mike Cherry, National Chairman at the Federation of Small Businesses (FSB) released this statement:

“With Theresa May now confirmed as the next UK Prime Minster, the Government must act decisively to secure our long-term economic stability after the decision to leave the EU. Immediate action is needed to improve small business confidence and allow them to reliably plan ahead for the future.

“The new Prime Minister will decide the UK’s approach to EU negotiations, and she must ensure that smaller firms’ interests are taken into account – simple access to the single market, the ability to hire the right people, continued EU funding for key schemes and clarity on the future regulatory framework.

“We also call on Theresa May, as the new Prime Minister, to guarantee non-UK EU nationals, many of whom run their own small businesses or are employed by small businesses, to be granted the right to remain in the UK both during the negotiations and thereafter – and to use the negotiations to ensure that UK small firms and the self-employed who work in the EU can continue to do so.

“With business confidence at the largest annual fall, Government must get back to business on the many vital issues which had been put on hold during the EU referendum campaign and subsequent fallout. These include key infrastructure projects like airport expansion, HS2, energy security and the Northern Powerhouse as well as delivering on business rates pledges and changing plans for quarterly tax returns.”

It seems that list keeps getting longer….