The Labour government ignores the plight of the so called small and medium sized businesses at their peril. Forgotten amongst the many problems facing the UK economy are the 3.6m SME’s, many of which are struggling to make ends meet and the government could do more, but choose not to.

Many SME businesses are bound in a mountain of red tape to do with tax, VAT, employment and paternity rules, health & safety issues and the many other headaches passed onto them by the government departments of this Labour administration. The vast majority of the people that work in these government departments haven’t got a clue as to the value these business owners add to the UK economy (some £1100bn per annum) and for that matter, couldn’t care less. Ask any business that exports products to the European Union. Because of the problems associated with ‘carousel fraud’, something that was very much related to the mobile phone industry, the VAT office now passes the burden for VAT checking onto the business owner. Often the VAT office will instruct the business owner to charge another European company VAT, the latter objects, the VAT office stands firm and the order is lost for ever.

Add to that the raft of existing and new health & safety rules. If the company employs more that 5 people, they are literally swamped with rules and regulations. The business owner now has a choice, they can ignore them at their peril, or employ a consultant, a full-time health & safety officer or digest the rules and do it themselves. Instead of driving the business forward, the business owner is expected to spend valuable time and resource on what can often be described as, unnecessary health & safety rules. Don’t get me wrong, some of these rules are necessary, but they have now become so burdensome that they are suffocating many small and medium sized businesses.

If that was not enough, what of business rates? These often account for some 50-55% of the lease or rental costs of the office, factory or industrial unit. Ask any business owner what he gets for his money and he will not be able to tell you. They are even charged, often 3 times as much as the cost of a private contractor, for collecting their waste. If they suffer from anti-social behaviour, vandalism or the like, they cannot get a police officer to investigate, because they are too busy with their own paperwork, instead, if they are lucky, they might get a visit from a well-meaning, but utterly useless Community Safety Officer.

On top of all that, tax breaks for small and medium sized businesses are virtually non-existent, removed, for the most part, by this Labour government. Therefore, you have to ask these business owners why they bother, it is probably because they are so far in, they cannot extract themselves without losing everything!

Apart from the red tape burdens, small businesses are invariably at the mercy of larger businesses. Many, especially when things are tough, or their year end is looming and they want to maximise their cash reserves, pay their invoices late. Some SME’s will tell you how they have to wait for 6 or 9 months to get paid by companies, that can, but won’t pay until they absolutely have to. More businesses fail as a result of poor cashflow that for virtually any other reason. You can have a sound business, but if you don’t get paid in a timely manner you are in trouble.

So, maybe they could consider factoring, this is one way, if expensive, that SME’s can get the cash they need to survive. But this is now becoming more and more difficult as the banks increase the criteria, raise the interest rates and reduce the amount of money available. In addition, banks are increasingly asking for more and more security, which can include a fixed and floating charge or some other form of personal surety.

New Labour in general and Gordon Brown in particular has made much of how “our policies” have allowed small and medium businesses to thrive. This is quite simply a lie. Business owners have set up their businesses and developed them in spite of the governments high taxation, red tape and indifference, not because of any initiative introduced by this government. SME’s have been very much on their own, but I suspect that many will feel, more than ever, the abandonment that is the New Labour policy towards the SME sector. I predict, that unless there is dramatic, sustained and immediate action by this government in relation to the SME sector, that more will go to the wall than at any other time in our history and the responsibility can be left firmly and squarely with Gordon Brown when he was chancellor and New Labour.

The government may need reminding that there are estimated to be some 3.8m SME’s in the UK, of which over 99% employ less than 50 people. Some 3.6m actually employ less than 10 people and a further 167,000 less than 50 people. Yet, the SME sector accounts for nearly 99% of all UK businesses, some 12.6m employees and an estimated contribution £1100bn or eleven Northern Rock’s. Many of these same companies are suffering and if their failure rates continue to rise, this will have a direct affect on unemployment and tax revenues. In terms of the latter, the government would do well to remember that many small businesses and SME’s do not have the benefit of fancy accountants looking at ways to reduce their corporation tax.

If just 10% of these businesses fail due to the continued indifference demonstrated by this government, there will be an increase of 1.3m unemployed. Quite apart from the personal affect on each and every one of these individuals, the government, via the taxpayer will have to support these people until they can find alternative employment, which will provide a further burden on the remaining taxpayers, plus the government will no longer benefit from employees tax, employees NI, employers NI, VAT and corporation tax.

For every business owner that suffers a business failure, you can fairly certain, that a good proportion of them will not try again and that means that some of these employment opportunities will be lost forever. Gordon Brown always likes to take the credit when things go well, even if he had nothing to do with it, it is now time he put something back and helped these businesses before it is too late.

Yesterday, David Cameron, in his address at the conservative party conference told us that he was a man with a plan. The generally accepted definition of a ‘plan’ is ‘A scheme, program, or method worked out beforehand for the accomplishment of an objective’. Now, whilst I accept that he may have a plan, his speech was short on detail and therefore, he must either expect the electorate to take him at face value, or he intends to publish more detail in the future. If it is the former, then it is a very big ask, given few, if any politicians have earned the trust of the electorate. If the latter, then I would suggest that it be sooner, rather than later if he wants to be considered a heavyweight, rather than a lightweight.

It was clear that David Cameron wanted to come across as sincere, a man of depth, with honesty and sincerity at his core. Excellent values, but if I may be so bold? David Cameron adds little, when he simply repeats what we already know, that the economy is sliding towards a recession, the government has incurred significant debts and that the overall tax take is on a decline in line with the economic downturn. He tells us that we must fact a period of austerity and that he must make, indeed will make the tough decisions for the long term benefit of the country, “no matter how unpopular” that makes him. Really? Well I have got news for you mate, we have just had 11 years of tax rises and there is no point in the electorate voting in a Conservative government that is promising more of the same, No way sunshine, not in a million years.  

David Cameron may, albeit based on yesterday’s speech this is hardly guaranteed, win the next election simply because so many people are fed up with New Labour. But, if Cameron thinks he will be whisked into Downing Street on the back of tax rises, I think he is wrong. Okay, so he hasn’t said it in so many words, but isn’t that the point, we are all fed up with politicians talking in code, saying one thing and meaning another. However, if he tells us he is going to put up taxes, he would probably need to explain which one’s, by how much, when, and of course, why. So instead, we get coded threats about David Cameron being willing and ready to make the ”tough decisions”. Sorry mate, that doesn’t make you clever, because we could all do that, even Labour. David Cameron doesn’t deserve to be elected on a principle of using higher taxes to prop up government finances, after all, surely a principled man like David Cameron wouldn’t approve if we all went and helped ourselves to more money from our employers pockets and lets face it, there is no difference.

With a bloated public sector employing one in five of the workforce, massive government waste on projects and initiatives that have gone nowhere, or are going nowhere, there is plenty of ‘fat’ that be cut before dipping into our pockets. Much as many of us want to get rid of New Labour, I would urge floating voters not to vote for David Cameron on a mandate, coded or otherwise, of higher taxes. This is because it really doesn’t take a very clever man to increase taxes, in fact, that is the easiest thing to do. Increasing taxes is what we would expect from a novice, a man of little experience and man short on ideas, ability, depth or lets face it, credibility. It takes a real man, or woman, to tackle the reason why so much of our money is needed in tax and that, is what we have come to expect from a conservative leader. There must be a war on government waste and excesses.

I believe Cameron is sincere, but I also believe his personal life is shielded from the real problems of the people in this country. He doesn’t have to struggle paying his mortgage, car payments or utility bills. Yet he meets a couple of people and think he knows what it all means. If I spend 10 minutes observing my car being serviced, does that mean I am a mechanic?

I have said, in the past, that anything is better than New Labour. But if I am honest, a new government, that still believes that they are entitled to increase their tax take from the British public, in spite of the hardship, before knowing how much they could save by cutting government excess and waste, doesn’t deserve our vote.

Think again Cameron….the LibDems have failed miserably for the past 3 or 4 elections because they thought the British public would agree to higher taxes. They were wrong and you are wrong. It is possible that the conservatives will get in because of the significant backlash against New Labour, however, if we know that the conservatives are going to put up taxes, we may just decide that it is better the devil we know and stick with experience.

I have always been a conservative, but I could not and will not bring myself to vote for any party that includes tax increases as part of its commitment, not least because this current administration has left enough fat within government to keep a butcher employed for 5 years without losing any of the meat. Think about it Mr Cameron, get rid of some of your Eton boys and get some real people in to advise you….before you cock it up!