Government help for small business is once again too little, too late
My Week: The Independent's Business Editor shares his top stories
The Queen’s Speech would have us believe that the Coalition will end this government term as it started it: championing small business and free enterprise.
In fact, there was too much panic over cutting the deficit four years to bother about the minutiae of what small business might actually need. That the Small Business, Enterprise and Employment Bill is being readied for the end of this parliament rather than the start says plenty about priorities.
The Bill contains some old favourites: reducing red tape, opening up procurement processes to smaller firms and getting bigger companies to pay their bills more promptly. But mention of access to finance is the issue that catches the eye once again.
Unlike the effectiveness of the Help to Buy scheme in getting first-time buyers onto the property ladder and stoking confidence, the Funding for Lending programme that was refocused on corporate credit has done little. Recent data showed that lending to small businesses sank by £723m in the first three months of the year. Renewed efforts by Lloyds and Santander to grow their small-business franchise have been offset by Royal Bank of Scotland drawing in its horns. Meanwhile, the Business Bank idea has been a missed opportunity.
Disappointing lending doesn’t appear to have harmed the creation of new companies, however, even though the suspicion is that redundant workers who have set up as sole-trader contractors have flattered the figures.
I am reminded of what LinkedIn founder Reid Hoffman told me a few years ago. The Silicon Valley veteran regards an economic downturn as an ideal time to set up a new business because it is unlikely that the competition will be so strong.
It is true there is never a bad time to start up if you have inherent optimism that any entrepreneur needs in spades. But if you follow Hoffman’s logic, those that stand the best chance of survival will have grasped the nettle long before now. It means that this “Help to Grow” Bill could be in the nick of time – or three years after Britain’s hardy band of small business people really needed it.
It seems as though the bookies can’t win
The bookies might be laying odds on Argentina or Brazil triumphing in the World Cup which kicks off on Thursday, but a winning tournament for them looks more like an Algeria-Japan final after a series of nil-nil draws throughout the group stages.
They could do with some luck. The biggest names in gambling have suffered a losing streak this year, with shares in Ladbrokes and William Hill – which fell out of the FTSE 100 this week – down by 17 per cent and 14 per cent respectively and talk of a Coral stock market flotation gone quiet.
It’s largely down to the hike in duty on fixed-odds betting terminals, which brought addictive, casino-style games such as roulette to the High Street. When the measure was announced in the Budget, the Treasury estimated it would raise £335m over the next five years.
The suggestion that these terminals has slowed the rate of closure of betting shops and therefore preserved jobs is hard to swallow. What is clear is there are fewer punters spending the afternoon in these establishments studying the racing form as the industry shifts online and onto mobile phones.
Politicians are doing what they do best in these situations: lambasting the industry for putting temptation in the way of the weak-willed electorate on the one hand and upping its share of the spoils with the other.
Which is better? More empty High Streets or Betfred and co going into the coffee-bar business? The bookies are already looking beyond the last kick of the ball in Brazil to the autumn conference season. That is when the political parties will try to outdo each other with manifesto pledges to clamp down further. When you consider the treatment of late-night casinos and websites that offer much the same opportunity to rinse out your wallet, Hills and Laddies seem to be paying the price for being so visible.
The family way no longer washes at the supermarket
You know a company is in trouble when it airs its dirty laundry in public. Last year Lord MacLaurin did the honours at Tesco’s annual meeting, helpfully lamenting the legacy that Sir Terry Leahy had left the present boss Phil Clarke to wrestle with.
It was Sir Ken Morrison’s turn in Bradford on Thursday, attacking the strategy of Dalton Philips, the man in charge of the eponymous supermarket that his father founded.
Morrison was a super retailer – but in a different era. And all those who laud him should remember the cack-handed takeover of Safeway that took years to digest and left the chain far behind when it came to building up its online and convenience store presence.
Philips’ about-turn and the accompanying poor trading is enough to make anyone curse. That Morrison, whose family owns less than 10 per cent of the business, has seen his influence wane is clearly another source of frustration. The honorary president told me a few months back that “I don't have a vote, I am not consulted and I don't have views. It's not a job that I relish, you know.”
The trio of FTSE 100 companies that remain family controlled - Associated British Foods, Schroders and Daily Mail and General Trust - have all fared well coming out of the recession. Institutions who buy the shares know what they are getting into. But when the founding family is still involved but no longer has control, it can be messy.
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