This Government’s Agenda for Small and Medium Business – Thrive or Merely Survive?
Readers may recall that the purpose of this consultancy is “Backing Business Owners”. So we keep in regular touch with the mood and thoughts of these owners of Small and Medium Enterprises.
Back in 2017, there was considerable trepidation at the new Government, led by a former President of the International Union of Socialist Youth who immediately pronounced that “capitalism was a blatant failure”. Time and an avalanche of challenging events – generally well handled – have reduced owners’ concerns but their wariness remains. Wary at the long-declared Labour agenda to transform the nation to a Scandinavian social democracy – high taxes, large public sector, redistribution, social / economic leveling. Over decades, transformative changes in policy have embedded increased government engagement and redistribution in the economy, e.g. Working for Families.
The current Government takes this further, skewing its proposed spending so that no one wants. But houses, comfortable living standards and the eradication of poverty will take money – a lot of money. So who will pay the piper?
Much depends on private sector employers. Signals are confused and owners are perplexed. Does the Govt want the SME sector to thrive – or merely survive as payers of wages and taxes?
Recent actions are mixed: –
- Survive – Yes
- Massive injection of cash for wage subsidies, Resurge and loans, all to prop up the private sector and prevent layoffs
- Thrive – No
- Increases in minimum hourly rates beyond inflation during an economic crisis
- Doubling sick leave to 10 days
- Removal of 90 days’ work trial
- Empowering Unions
- Excessive safety regulation
- Bias towards Big Business during lockdowns
- Blocking immigration of needed skills
- Pressure to give back the subsidies
- Reduced efficiency and effectiveness from sectors that business depends on or is impeded by: –
- Education
- Goods movement
- Construction
- Productivity
- Policing
- Local Government
Government seems to be hammering the SME sector rather than the property owners where the bigger opportunity for more tax lies. Business owners are justified in asking why.