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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 today.

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

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