The group whose board directors include Sir Richard Branson, Luke Johnson, Brent Hoberman – Founder, lastminute.com & mydeco.com, Duncan Bannatyne and the entrepreneur Lara Morgan has called for bolder, targeted action, and an SME Manifesto, to help smaller businesses and entrepreneurs to kick-start the UK’s faltering economic recovery.
Shalini Khemka, CEO of the London Entrepreneurial Exchange, commented: “In probably the toughest economic environment for generations there needs to be a kind of covenant between the Coalition Government and the country’s small and medium-sized businesses, the backbone of the UK economy, to help produce the recovery that we all want. We are calling for an SME Manifesto for Britain, a bold, targeted programme of creative initiatives to ignite growth among SMEs and provide the spark for broader economic recovery.”
‘SME Manifesto for Britain’:
- Increase the number of the UK’s current 21 enterprise zones – make the UK into one large enterprise zone
- Extend the NI holiday and widen to include London and the South East
- Further lightening the burden of employment law compliance – costs SMEs around £2.5 billion annually
- Ease the health and safety administration costs – costs SMEs close to £2 billion annually
- Make tax and regulatory systems more proportional to small business – continue slashing red tape
- Consider temporary VAT cuts for smaller firms in at risk sectors, such as Retail and Leisure
- Review specific measure to increase apprenticeships and internships
Though the Exchange welcomes the measure on credit easing in Chancellor George Osborne’s speech earlier this week, this will not quickly spur lending to SMEs but is a more longer-term initiative that has still to be thought through to create a market in their bonds and securitised loans.
The Vickers report recommendations are, on balance, likely to help credit flow to smaller businesses, however these reforms will be phased in over the next eight years and the urgent need is for greater bank lending to SMEs now if they are to play a significant role in reviving the British economy.
The measures on shielding SMEs from employees taking them to tribunals over employment issues for a longer period will probably encourage more firms to take up new staff. More could be done to help firms take on greater numbers of apprentices – often the first step to full employment for job seekers – and to consider supporting more formal intern programmes.
In the week of the Conservative Party Conference and ahead of Prime Minister David Cameron’s speech, which is expect to be pro-business but announce no specific new measures, the Exchange is calling on the Coalition Government to draw up and implement an ‘SME Manifesto for Britain’.
This would be a range of bolder, targeted measures as part of a sustained, creative programme of initiatives to spur the growth of smaller and medium-sized businesses, reduce unemployment and help them re-balance the UK economy.