Civitas - Small business owners experience ‘a great disconnect’ from government – despite repeated claims they form the ‘backbone of the economy’
Politicians of all parties repeatedly declare that small businesses form the ‘backbone of the British economy’. Yet a new survey shows that those same politicians too often fail to provide the right level of support for small business, resulting in ‘a great disconnect’, a new Civitas book reveals.
Tim Knox finds in two surveys that many small business owners feel that government tend to listen to big business far more closely to that of small business – and that multi-national companies receive preferential treatment from government.
Micro-business owners (with five of employees or less) feel unenthusiastic about the support they get from government. About one in three business owners surveyed felt government support for their business had got worse over the last five years, while almost half said it was neither better or worse. Those trends are contributing towards a sense of neglect from government for small business. Knox writes:
‘With over two-thirds of respondents feeling that they receive no positive support from government, it is clear that the rhetoric of politicians claiming to support small businesses is not reflected on the ground.’
‘Another concern for government should be the extraordinary sense among the majority (60%) of micro-business owners that there are no business services provided by government which are intended to help small businesses, despite the fact that there are many such services.’
This marks the great disconnect. Several proposals are set out to help government reconnect with the small business sector, including:
- Government could reverse the easy inclination to listen to big business as if it were the voice of all;
- The government should undertake regular polling of small business owners to ensure that it has an accurate register of small business opinion, of how that opinion changes and of the reason for any such changes;
- It could develop communication strategies to ensure that initiatives intended to support small businesses are being heard and are having the desired effect;
- Government services could be better communicated by adopting the Charity Commission advice it sends to all charities as a template;
- The government could focus any attempt to support SMEs in those regions which have a relatively low number of businesses per head of the population.
Update: ‘Unleashing the potential’ of the regions
Following criticism of the government’s business Councils in this report, Boris Johnson last week announced plans to axe the ineffectual ‘Small Business, Scale ups and Entrepreneurs Business Council’ and the four other Councils in the business council network. Tim Knox comments:
‘It is excellent news that the government is now trying to reconnect small business and government. When doing so, it should also focus on the significant regional disparities in SME activity: for example, the North East of England has just 694 businesses per 10,000 people compared to 1,544 in London.
‘“Unleashing the potential” of the regions should be a priority. And a first step should be to engage better with small business owners by following through with the recommendations in my report.’
The Great Disconnect
Latest News from
IFG - Disputes over Brexit increase the need to strengthen the Sewel convention17/09/2020 10:35:00
A new Institute for Government paper says the future of the Union could be put at risk without reforms to the principle of legislative consent which lies at the heart of the devolution settlement.
IFS - Large variation in earnings returns among postgraduate degrees, with returns of more than 15% for masters in business and law, but negative returns for many arts and humanities courses17/09/2020 09:35:00
Women with a masters degree earn considerably more at age 35 than those with only an undergraduate degree, with average earnings of £35,400, compared with £32,500 for those who do not go beyond undergraduate level. For men, the differences are even larger: masters graduates earn £55,800 on average, £5,000 more than those with only an undergraduate degree.
IFS - The long shadow of deprivation: Differences in opportunities across England15/09/2020 15:20:00
A socially mobile country provides equal opportunities for everyone, across big cities and small towns, and regardless of whether your parents are rich or poor. This report makes use of newly linked administrative data on all state-educated pupils born between 1986 and 1988 to follow a group of sons from where they grew up, looking at their family circumstances and their educational achievement, through to the labour market.
IPPR welcomes furlough reform plan proposed by Labour at TUC Conference15/09/2020 14:20:00
The think tank had previously called for such a scheme to prevent mass unemployment by encouraging part-time working
Labour market deterioration “not (yet) as bad as feared”, says IEA expert15/09/2020 12:35:00
IEA Economics Fellow Julian Jessop responded to the latest unemployment statistics published by the Office for National Statistics (ONS)
JRF - Targeted furlough scheme needed as new research shows who is likely to lose their job15/09/2020 11:35:00
A new Pre-Vaccine Jobs Risk Index produced for JRF shows that sectors such as hospitality, retail and beauty, which rely on close contact with members of the public but are not within the sphere of health, care or essential services are likely to be hit hardest by coronavirus until a vaccine is found.
IFG - Deal or no deal, the government should adopt its own state aid regime15/09/2020 10:35:00
The UK would benefit from a strong ‘state aid’ system whether or not it strikes a trade deal with the EU, says a new report from the Institute for Government.
Demos - New research finds social fractures caused by Covid-19 are more divisive than Brexit15/09/2020 09:35:00
New research from the cross-party think tank Demos has found that Covid-19 has now caused deeper social fractures than Brexit. The poll finds that over half of mask wearers in Britain (58%) have severely negative attitudes towards non-mask wearers, and the vast majority (68%) of people who did not break lockdown rules have strong negative views about lockdown rule breakers.
Work Foundation report calls for Government to mitigate crisis facing retail workers10/09/2020 11:35:00
A new report from a leading UK think tank reveals the extent of insecurity within the retail sector and calls on Government to intervene and mitigate the crisis facing hundreds of thousands of workers.