Finance and Business Blog

A year ago the Business Secretary, Lord Mandelson, made a pledge that small businesses would be paid within 10 days of an invoice being submitted. It seems, however, that only 2% of invoices are in fact paid within this period, with 30% being paid more than one month after an invoice is submitted.

Martin Williams, MD of Graydon said: “Was this government pledge another example of government rhetoric aimed at calming the nerves of the business nation in the midst of a severe recession, without any real hope of proving deliverable?”

“Some would argue that this policy follows in the footsteps of the Top up Credit Insurance scheme and the Enterprise Finance guarantee Scheme- other “Made in Recessionary UK” products that really failed to deliver what they were meant to, to help the country through the downturn.”

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Conservative leader David Cameron has announced three new policies to encourage enterprise and those aspiring to start businesses:

• Ending restrictions on people starting a business in social housing.
• Increasing the statutory threshold over which the Government can petition to make a business insolvent.
• Reducing the number of forms needed to register a new business.

Mr Cameron had this to say:

“We are going to get out of this recession by trading our way out, by businesses deciding to create wealth and to go after new markets, to export. It takes 13 to 14 days to start a new business in this country, in America it’s half as long, we have the ambition of making us one of the fastest countries in the world to start up a new business.”

“The insolvency threshold is currently £750 we would lift that to £2,000 because when you look at the figures more small businesses have gone bankrupt in this recession than in previous recessions and a number have been pushed there by the Government itself. It may sound like a small thing but I think it’s significant, a huge number of small business are started in people’s homes but you know what, many social landlords forbid you to run a business from your home, we’re going to change that as well in discussion with social landlords.”

“So, these are three big changes to help small businesses. That’s where the wealth, that’s where the jobs, that’s where the enterprise has got to come from and to help with that we have to get rid of this anti aspiration, anti achievement culture.”

“The message that seems to be coming out of Labour at the moment is don’t start a business, don’t buy your home, don’t try and leave money to your children, don’t try and get on. They’ve made it so difficult to employ people, so difficult to start a business. All of that is going to change.”

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The PCG is encouraging government departments to reserve 10% of their budgets for freelance workers and the self-employed, which would demonstrate that ministers are committed, beyond just words, to ‘thinking small first.’

PCG’s managing director, John Brazier, had this to say:

“Flexibility in the labour market is the key to ensuring Britain’s future economic
success.”

“The next government should encourage freelancing as a flexible, innovative and entrepreneurial way of working that enables business to perform more cost-effectively, especially when recovering from recession.”

“There needs to be a clear recognition of freelancing as a valid way of working,” Mr Brazier added. “We want to see a pro-business climate fostered in the UK, a real commitment from policy framers to think small first, not just say it.”

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Theo Paphitis, the well known panellist from the popular Dragons’ Den TV show, has advised entrepreneurs to wait until after the General Election before starting up a new business venture.

Speaking on BBC2’s Working Lunch programme he said:

“We are in January 2010, there will be an election by May 2010. We are in no-man’s land, no one can make a decision because our polticians whether Labour or Tory won’t tell us what they are going to do about the economy.”

“If you have to invest, you don’t know whether VAT might go up to 20 per cent or what tax effects might be, if interest rates are going up - all this might have an effect on the bottom line or total survivial.”

“This is just temproary. Entrpreneurs spend their lives taking risks but they are calculated risks. When you can’t put the ‘calculated’ in to a risk, that’s a gamble - and you don’t want to be there just yet. Take your time.”

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The Professional Contractors Group (PCG) is calling on Government and policy framers to take a fresh approach to freelancing. 

John Brazier managing director of PCG said:

“All too often Government and policy framers have failed to pay adequate attention to the needs of the UK’s 1.4 million freelancers. Freelance businesses are part of the bedrock of the private sector, bringing a degree of flexibility and a skill set to the economy which is a real asset for UK plc. There needs to be a clear recognition of freelancing as a valid way of working; fairer taxation, better regulation, easier access to the market for the smallest businesses and a proper appreciation of the changing work patterns for millions of people.”

“We want to see a pro-business climate fostered in the UK, a real commitment from policy framers to think small first, not just say it. Fair regulation means regulation that is clear, accessible and not unduly burdensome. Fairness means allowing freelancers easier access to the market for their services. The Government needs to ensure regulatory barriers, burdens and costs to tendering are reduced, so freelancers can truly compete with larger businesses. Heavy handed and senseless laws weigh business down like a ball and chain. This is even more so with nano-businesses. Every hour spent complying with red tape is an hour not spent productively. We need to free up Britain’s talents to create wealth, not stifle them with top down bureaucracy.”

“It is PCG’s fundamental belief that flexibility in the labour market is the key to ensuring Britain’s future economic success. The next Government should encourage freelancing as a flexible, innovative and entrepreneurial way of working that enables business to perform more cost-effectively, especially when recovering from recession. The start of a new decade provides an opportunity for fresh, innovative thinking. We will be continuing to push this message up to the election and beyond.”

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