24th November, 2016 No Comments
The short answer is ‘not a lot’, despite Mr Hammond stating “My priority as Chancellor is to ensure Britain remains the number one destination for business.”
Yesterday, Chancellor Philip Hammond brought us the last Autumn Statement for the foreseeable future as plans were announced for the spring Budget to be downgraded to the ‘Spring Statement’ and the main Budget to be delivered in the Autumn.
He outlined plans to increase spending on roads and transport links including the Oxford-Cambridge expressway and a major road scheme in the North, and extra funding to improve rail signaling. But although transportation for businesses may be improved, with the rise in the Insurance Premium Tax from 10% to 12%, additional costs are set to come out of the pockets vehicle owners.
In line with George Osborne’s previous budget commitment, Corporation Tax will fall to 17% by 2020. This is the lowest rate of all the G20 countries but not as low as Donald Trump’s promised to reduction of corporation tax in America to 15%. Speaking of “understandable public concern that the pitch is tilted in favour of multinational groups”, Mr Hammond said he would limit tax relief on corporate interest and the treatment of previous tax losses.
The most notable commitment is for a £23bn new national productivity investment fund to be spent over the next five years, increasing by £2bn a year by 2020/21. The fund is designed to bolster research and innovation.
Additionally, in the hope that takeovers of British tech start-ups by foreign buyers will be reduced, export finance is to be doubled and £400m will be injected into venture capital firms via the British Business Bank.
Small businesses in rural areas will receive tax reliefs up to £2,900
There will be a crackdown on employers offering ‘workplace salary sacrifice schemes’ (where workers receive untaxed benefits such as ultra-low emission cars instead of pay), whilst the National Living Wage will be increased from April 2017, and personal tax allowance increased to £11,500. The self-employed will see a clampdown on so-called ‘disguised earnings’.
“This was always going to be a difficult statement from the new Chancellor given the uncertainties posed by Brexit.” said Kevin Horne, Chairman, Cavendish Enterprise. “No doubt we can expect more in the next budget when sufficient time has elapsed for a considered approach to the needs of the country outside the EU.
“For small businesses there was not much to cheer but also not much to jeer either. For now it is “steady as she goes” but there is a massive opportunity for radical reform in leaving the EU and whilst it would involve short term sacrifice the long term prize could be great. Flat rate taxes, abolishing reliefs, simplifying regulation and really slashing bureaucracy will prepare us well for what the future holds – unfortunately few politicians have a long term approach caring more about re-election rather than strategy.”
Summarised by Davina Young , Marketing Manager, Cavendish Enterprise
2nd December, 2015 No Comments
Cavendish Enterprise partners realise that they now have an even greater responsibility to support businesses in England.
As the news continues to filter through of the effects that the Spending Review will have on business support services the partners are working together to ensure that their business support offering is maximised to minimise the effects of the 17% cut to business services. Saddened by the loss of other support services and the knock-on effect on SMEs, Cavendish will be working even harder to support businesses as they start and grow.
As a partnership of enterprise support organisations, Cavendish will continue to offer national programmes to start up and growing small businesses within their area, as well as their bespoke local programmes. There are a number of support programmes and a wide range of services currently available, each with a tailored offering, suitable to meet most SME business support and growth requirements.
Kevin Horne, Chairman of Cavendish gives his views on the effects of the recent government cuts to business support services and the implications for small business. By setting the current business support landscape and potential implications, Kevin frames it with a positive spin by highlighting current funded programmes that can offer business support and high growth advice:
News broke during the National Enterprise Network conference last week that the government was ceasing its Growth Accelerator and Manufacturing Advice Service. There has already been some gnashing of teeth as little notice was given and that the closure is immediate. I would argue however that this is a bold statement by the government and whilst the manner of the closure is clumsy, the long term effect may not be as devastating as first thought. We know that BIS has to make 17% savings and so it cannot be a surprise that there will be casualties as a result.
When looking at where the savings should be, BIS has to look beyond its normal coterie of advisors and acolytes and examine the market. Government should only intervene where there is market failure. There are a huge number of growth advisors and companies that support the mid sector, and as such it cannot be legitimately argued that there is a market failure. Whether all businesses are prepared to access this advice is another matter but as always the good advisors will find a willing market prepared to pay. There will be many examples of companies prepared to state how they have been supported by GA and MAS and this is to be applauded but has the existence of these schemes actually stifled the market by encouraging growth firms to expect a handout to access advice and support which would help them to grow?
Government should intervene where the market will not, and act as a catalyst to encourage greater take up of what the market can provide – of that there is little doubt. It is doing that successfully with Start-up Loans where there has been Bank failure and this will continue for the life of this parliament. But it is a loan and not a grant and as such there is a real return and the rates of start-ups have been increasing so eliminating the funding barrier has worked. There will come a time when the banks will step in to plug this gap (perhaps they should be funding SULCo now?) and then the government can withdraw. The recent Growth Vouchers programme is another scheme which sought to encourage take up of what the market had to offer for a limited period and the results of the evaluation will be eagerly awaited to see what effect this has had on those who took advantage.
Market failure exists at the start up and early stage growth end of the scale and perhaps it will always be the case. The government has to set the scene to encourage new businesses to start and grow and then as with a toddler be prepared to let them walk unaided. They can adapt the macro picture to make the environment receptive to taking those first steps and it is doing that through a number of initiatives such as Enterprise Zones and a benevolent tax structure. Beyond that it risks creating a dependency culture amongst businesses if it continues to subsidise at all stages. The Local Enterprise Partnerships now have the duty to take up the baton and tailor support to their individual areas – this and a number of overlaying programmes with targeted outputs – such as Start & Grow – will help to achieve a dynamic and innovative business base.
I understand the dismay of those delivering the GA and MAS programmes but feel that BIS should be applauded at taking some difficult decisions to help to balance the books – when that happens we will all benefit!
Click here to see the business support on offer from Cavendish Enterprise partners.
28th July, 2015 No Comments
Kevin Horne, CEO, Cavendish, explores simple ways in which the Small Firms Minister could make a difference to SME’s.
Since the Election, it has been interesting and amusing to read the commentary on, and directed towards Anna Soubry, the ‘Small Firms Minister’. Many claim the idea for having a Minister dedicated to small business rather stretches credibility especially when you look at the job description which is unchanged from the previously titled post. The emphasis placed on ‘small’ is welcome, but will this change anything?
I am realistic enough to know that little notice is taken of ‘chatter’ such as this blog, but at least this is coming from someone who has started and run small businesses and supported more than most people in the UK today!
Big Business does not get Small Business:
There is a reason why Ministers and civil servants interact well with big businesses – it is because they are intrinsically the same. A ‘command and control’ structure; bureaucracy; inability to react quickly; little personal responsibility; and nothing personally ‘on the line’. Small business cannot hope to break into this cartel as they do not have the time or inclination to divert their attention from actually creating wealth in local communities. To change the way government interacts and supports the key SME community needs BIS and the Government to make the effort to break the cycle of big business domination. The Minister could make a real impact here by ensuring that she spends her time solely with the SME sector and eschews meetings with big business or their representatives for say 12 months. This would help to gain a true perspective of the sector and how and what the government can do without ‘contamination’ from a large company perspective. It is interesting to see the makeup of, for example, the Industrial Development Advisory Board which advises on business matters – all worthy individuals but hardly representative of the wider business community.
Do not patronise:
Nearly all of the entrepreneurs that I have met are more interesting people than those working their way up a corporate ladder. They are innovative, passionate, risk takers, and possessed of a keen intellect. Too often they are patronised by Government which treats them as children compared to the ‘grown up’ big business. The first thing that you realise when starting a business is that honesty is vital. SME’s realise that Government cannot do everything, and that there are limits dictated by a variety of factors. As such, announcements such as a ‘war on red tape’ are treated with a resigned sigh as we have heard it before and it never really works. Legislation is important and should ensure that there is a level playing field for all, in whatever sector. We understand that. Be honest and tell us what you have done – not what you intend to do. Small businesses will know when you have been successful without PR puff and they will reward you with their loyalty when elections come around.
Use your influence and power wisely:
We have all heard of the tales of clever tax schemes designed to minimise the tax paid by the multi nationals, or tales of local planning being worn down by the bottomless pit of developers. Government can close loopholes but cannot amend international practices on their own. What they can do is use their influence to shut out those who seek to avoid their civic responsibility. No honours for anyone involved with those businesses; no contact with Government or civil servants until they amend their ways; no visits by Minsters; or promoting of their PR schemes. This shunning policy can change behaviour as influence declines in these businesses.
I could go on as there are any other simple ways to change the face of business in the UK. The majority of businesses are well run but there are always those who will seek to gain an unfair advantage. Government needs to ensure that what it does is well thought through and free from loopholes. We seem to live in a society where the headline today is more important than the legacy in years to come. For those like me who have been around a long time, we can name a long succession of ‘Small Business Ministers’ but few, if any, who have made a difference. If we now have someone who is dedicated to the lot of the SME sector they can write their place in history and ensure a legion of supporters who have become used to being ignored, patronised or used.
Good luck Minister – all we ask is that you represent our needs and concerns – that alone will elevate you above your peers.
Written by Kevin Horne, CEO, Cavendish
The views and opinions expressed in this blog are purely the views and opinions of the author.
26th January, 2015 No Comments
2015 has arrived and with it perhaps the longest election run in that we have seen in recent history.
We all know what the ‘big’ issues will be, and where party lines will be drawn. However, much less clear is where any of the parties stand on new and small businesses. We hear many warm words from government and opposition but do they really listen to what the business community and the country really needs?
Policies need to be developed which have longevity; can survive more than one parliament; and are based on such common sense that no colour of government would seek to make anything other than minor changes. Too often a new government means throwing out everything before it just to reinvent it at a later stage – often worse than it was before. We live in an interventionist capitalist society, and business does require some help in order to grow and provide more taxable income in order to deliver what the country requires in other areas.
As any good business person knows, ‘the best ideas are often the simplest’, and I make no apologies for a simple manifesto to keep our business base in robust health. Headlines only because of space, but feel free to ask about the “meat on the bones”!
These will require state intervention as the market does not cater here. Continue with Start Up Loans – a great idea and a low cost intervention that makes a real difference. Provide a nationwide start up programme such as Ready for Business, which is low cost and has proven to deliver great results. Let it be run by Enterprise Agencies who operate in the ‘not for profit distribution’ sector and provide high quality without taking profit unlike a few companies that we see in this sector! Provide mentors for the first two years of a new business (if required).
Early Stage Growth
Having nurtured the baby we need to teach it how to stand on its own. As such a growth programme which requires 50% payment by the client is a fair way to encourage a growth spurt. We have several schemes which have the basis on which to build, so simplify these and make available to all.
This is needed at certain stages in a business life such as exporting for the first time, or developing Intellectual Property. Have a high quality national core which reacts to client demand in a timely and effective way.
Medium Sized and Above
At this stage a business should be able to stand on its own and so no state intervention at all. No grants, incentives or bribes – let the market determine capability.
So … how do we pay for this? Savings on ‘inward investment’ grants and support to large business will go a long way. The savings on welfare bills through a more diversified business base and lower unemployment will also soon recoup any initial investment. Fines on banks should go directly to Start Up Loans.
I can hear the howls of anguish already from many vested interests but combine these measures with ensuring that companies pay the correct amounts of tax – yes we are talking about the multi-national villains – and the country has a bright future ahead of it. We can dream…….
Written by Kevin Horne, Chief Executive, Nwes