Let me start this week by laying an ugly rumour to rest. I am NOT the Newcastle United fan who had Cup winners 26/02/23 tattooed on his leg before the recent final.
Champions League winners 01/06/24? I’m saying nothing. And the finals at Wembley. I’ll see you there…
Before that, though, we have next week’s Budget. Amazingly, Jeremy Hunt– the same Chancellor that delivered the last Budget – will rise to his feet on Wednesday lunchtime and… Well, he will help us all with our heating bills for another three months. There are rumoured changes to childcare funding – although he is apparently set to reject the Treasury’s call for a £6bn ‘big bang’ solution.
What about small businesses?
‘The dog did nothing in the night-time. That was the curious incident,’ remarked Sherlock Holmes.
Sadly, I don’t think it will need much paraphrasing…
There has been some good economic news for the UK of late. There is – supposedly – plenty more to come. Inflation is forecast to be sharply lower by the end of the year. Interest rates are expected to peak at 4.5% and stay there – allowing us all to plan with some certainty. The economy should start to grow again. Both business and consumer confidence is forecast to improve; the current account deficit will start to fall, and the huge cost of servicing Government debt should also come down.
So Jeremy Hunt will undoubtedly have a good story to tell on Wednesday lunchtime. But then, he’s a politician…
The key question for us is simple: will he really grasp the small business nettle?
What does a business want? This article on the BBC summed it up. Help with energy bills – especially for the hospitality sector. More money on recruitment, skills and training. More incentives to invest – and, above all, action to bring down inflation, which, in many cases, is compelling businesses to absorb costs they can’t pass on to customers.
But are the problems simply too big for the UK Chancellor to deal with? After all, George Osborne regularly made the point that whatever action he took could be rapidly blown off course by global events.
…And rising energy bills are not going away any time soon. Despite reports that Russian reservists are ‘fighting with shovels,’ the war in Ukraine looks set to grind on and on.
Then there is a much broader question: is the West still competitive?
I rarely read Spiked, but this recent article caught my attention. It’s certainly not the picture the Chancellor will paint on Wednesday…
The author, an assistant professor in Vienna, argues that European industry is ‘being strangled by sky-high energy bills and mountains of bureaucracy.’
He cites the example of BASF, a company ‘older than Germany itself,’ which is closing several production facilities in Germany and making 2,600 workers redundant. In future, say BASF, European customers will be supplied with chemicals from China, South Korea and the US – with the author suggesting that energy bills and bureaucracy mean that Europe is no longer a globally competitive market.
The US, of course, has its own problems as it tries to reduce dependence on Asia. Meanwhile, China cheerfully buys up all of Russia’s oil – at a reputed $40 a barrel – and has just signed a second long-term deal with Qatar for LNG.
Back at home, SMEs wrestle with bureaucracy. The article in Spiked quoted the energy company Boreas. In order to build a wind farm off the Norfolk coast, they had to submit an environmental impact assessment.
Just the 13,275 pages…
No one is suggesting that we ignore the environment and crack on with each and every building project.
But I am saying that the problems of small businesses need to be recognised when the Chancellor delivers his speech next week. Yes, there are global problems, but Business can, does and will deliver economic growth. But it needs some help from Government. Specifically, it needs less red tape.
So let me leave you with an example of what business can achieve – from a company we’ve all heard of. And trodden on…
Lego – the toy which holds a special place in the heart of every parent. Is there any pain like it? In the middle of the night: your child is howling. Barefoot, you stumble to the bedroom. And stand on a piece of Lego. You limp back to bed. Your beloved shows little sympathy…
But Lego delivered 17% sales growth last year. Sales rose to £7.74bn. The company plans to open 145 new stores this year, mainly in China. There you are: we didn’t spend lockdown making Zoom calls in our pyjamas. We spent it building Lego Star Wars.
Given the right conditions and the right support, there is nothing an ambitious company cannot achieve. So when you stand up on Wednesday, Mr Hunt, trust us. Rein in the bureaucracy, help us keep our costs down, and give us the right economic conditions – and SMEs up and down the UK will deliver.
A footnote: I really wanted to call this one ‘what has the Budget ever done for us?’ Sadly, the tense was wrong. But I’ll include the clip anyway.
