PracticeConsultingComment – Brown should face basic issues

Comment - Brown should face basic issues

Next Tuesday, Gordon Brown delivers the Budget. As part of the pre- Budget warm-up, the chancellor has been touring the country, no doubt trying to show he is in touch with real people and real businesses, and not dominated by Whitehall Mandarins.

In his entourage on the last gig to Sunderland was David Irwin, enjoying his first day as head of the Small Business Service. I hope in between launching initiatives about how government was helping small businesses win in the e-business revolution that the newly-appointed small business supremo managed a quiet word with the chancellor.

If he did, he should have told Gordon Brown that while the internet may be a good thing, there were some basic issues which small businesses desperately need addressing which are much more in the gift of the chancellor than whether we all get wired up to the world wide web.

To back up his argument, Mr Irwin could have shown his boss a recent survey from the English ICA which shows there is a real danger of an economic divide: not this time between the north and the south, but between large and small businesses.

The institute survey revealed that 66% of practicing accountants thought it would be harder for small and medium-sized enterprises to survive this year compared with last year, despite an expectation of overall economic improvement.

The reasons for this pessimism included fears over tax rises, interest rate rises, the strong pound, excessive regulation, skills shortages and employment costs. For instance, over 90% felt that new legislation and regulation would have a negative influence on business profitability. Concern was particularly strong for the retail and manufacturing sectors.

As the institute said when it published its research: ‘Through their work at almost every level of UK plc, chartered accountants can offer a unique insight into the nation’s economic prospects. The message we’re getting from our members is that optimism about the general state of the economy is tempered by high – and rising – concern over the burden placed on SMEs.’

Next Tuesday is a chance for Gordon Brown to address most of those concerns and give help to this vital sector of the UK economy. Unfortunately experience suggests that we are unlikely to hear these real issues even mentioned from the despatch box, never mind addressed.

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