What have the slogans ever done for us? The party lines on SMEs » SMEInsider

What have the slogans ever done for us? The party lines on SMEs

houses of parliament

With employment and the economy still major worries for the UK public, it’s no surprise that the future of British business is a top talking point for party leaders ahead of the general election. But how will they help SMEs?

1. On Finance

Where we are now:

The current government has been very vocal about its support for government-backed loans to small businesses and has, in fact, just issued its 25,000th loan – a positive sign for SMEs. However, it has largely failed to get banks over their reluctance to lend, with some even using political efforts to improve lending as a vehicle for misleading small businesses (hello, RBS). As a result, more and more companies are looking to  crowdfunding and peer-to-peer lending as attractive alternatives. Some observers suggest that the major parties will be more interested in working out how to offer tax breaks to lenders than directly working with SMEs.

What the parties say:

A UK Small Business Administration would create a step change in the opportunities for small businesses from government procurement and improve the quality of support available, operating along a proper British Investment Bank and a network of regional banks to ensure that start ups and established firms can access the finance they need.” – Chuka Umunna, shadow business secretary (Labour)

‘By putting the onus on banks to refer these businesses to other sources of finance, we can help make sure the potential of the country’s small businesses isn’t lost…A better referrals system will be good for competition, and good for the economy.’ Vince Cable, business secretary (Liberal Democrats)

A big bank saying “no” should not be the end of the line for a small business… with our [alternative funding referral] plan, it won’t be.” – George Osborne, Chancellor of the exchequer (Conservatives)

2. On Cashflow

Where we are now:

Late payments can cripple SMEs, and recently, the government has made noises about putting pressure on corporates to pay on time, as well as reducing its own lead times for payments. However, the public sector remains one of the worst offenders, while many SMEs are resorting to invoice financing to help bridge the gaps.

What the parties say:

Late payment is a critical issue for small businesses. It can threaten the survival of an otherwise healthy business.” – Vince Cable, business secretary (Liberal Democrats)

The Prompt Payment Code is about encouraging and promoting best practice between organisations and their suppliers. Signatories to the Code commit to paying their suppliers within clearly defined terms, and commit also to ensuring there is a proper process for dealing with any issues that may arise” – Matthew Hancock MP, Minister of State for Business and Enterprise (Conservative)

What we’ve proposed is a reporting regime for FTSE 350 companies which would potentially be expanded to apply to any large business. It would mean companies would have to report incidences where they’ve paid suppliers late, and confirm that they’ve paid the corresponding interest in line with the EU Late Payments Directive. That removes the onus that currently exists on small businesses to pursue their customers.” – Toby Perkins, shadow minister for small business (Labour)

3. On Economic growth

Where we are now:

While we’re safely out of recession, the economy, as well as wages, continues to stagnate. The Conservatives want to tackle this with dramatically deepened austerity, while Labour and the Liberal Democrats are pushing for a more moderate approach. Getting the balance between managing debts and fostering growth is a major challenge for all three. Meanwhile, exporting is a hot topic, and is a major area of interest for many SMEs – although the promised “export-led recovery” has so far been weak. Troubles in the eurozone continue to impact on SMEs, with the Conservatives pushing for less EU “red tape” and Labour and the Lib Dems saying that a referendum on Europe would create uncertainties and damage overseas investment.

What the parties say:

Our response must be to grow the wealth of our country – not by big spending – but by big reform of our economy…A clear mission for the future backed by investment in infrastructure, world-leading education, science and research, gold-standard apprenticeships.” – Ed Miliband, Labour leader

British SMEs are already doing incredible things. And we urgently need more of them to follow that boldness… Increasing the number of SMEs that sell overseas by 100,000 has the potential to add £30 billion to the UK economy.” – David Cameron, Conservative leader

“The Regional Growth Fund is a helping hand from government to create thousands of jobs that last, boost the private sector and rebalance the economy.”- Nick Clegg, deputy prime minister (Liberal Democrats)

4. On Regulation

Where we are now:

Changes to regulation can cause massive headaches for smaller companies, and the coalition responded to this by introducing the Lib Dem’s novel “one-in-one-out” rule, whereby for every new piece of regulatory legislation that is introduced, an old rule is nominated for the scrap heap. This has been popular across party lines, with Labour also backing the move. Other attempts to support SMEs include the issuing of “growth vouchers” that can be used to match investment by small businesses in their development.

What the parties say:

We’re expanding the Red Tape Challenge, so it doesn’t just cover the red tape that affects businesses today, but the businesses of tomorrow too. Because we’ve heard from start-ups that they’re innovating so fast, their innovations are out-stripping the regulation that currently exists,” – David Cameron, Conservative leader

We need government to be a better servant – and customer – of our small businesses and to make sure that entrepreneurs’ voices are heard at the top table. A UK Small Business Administration is necessary to realising this ambition.” – Chuka Umunna, shadow business secretary (Labour)

A moratorium for the smallest and genuine start-up companies from regulations alongside the removal of obligations for flexible working and giving time off to train will be a real boost to businesses. It’s not right that businesses should have to deal with years of Government intervention by abiding by arcane rules,” – Vince Cable, business secretary (Liberal Democrats)