Digby Jones: Business leader says Britain fails to support struggling companies

Lord Jones said there was a knock-on effect to the wider economy if SMEs cannot grow and lack proper support

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The Independent Online

One of Britain’s top business leaders has issued a powerful warning that the country is too “risk averse” and “politically correct” and does too little to protect and help turnaround struggling businesses.

Digby Jones added that smaller businesses in general need greater support if the economic recovery is to be sustained.

His comments carry weight because he is a cross-bench peer who has served as trade minister in Gordon Brown’s Government and headed employers’ organisation the Confederation of  British Industry.

Lord Jones will tell the annual conference of the Institute for Turnaround (IfT) later today: “It is a sad fact of life that 21st century democratic capitalism has become so risk-averse, so politically-correct, so prey to the siren voices of a compensation culture – the likes of which we have never seen before.”

He will go on to say: “With any small business, especially one in its early stages, there are obstacles to overcome and calculated risks that must be taken in order to generate wealth. Too often the emphasis is put on failing businesses – without the appreciation that there always exists a risk-reward aspect to growth and generating profits.

“We understand that not all businesses will succeed, and when they do not, they need skill, courage and capital to give them the time necessary to review options, take advice from others and turn around their fortunes.”.

The IfT, whose members specialise in turning around struggling businesses, has long campaigned for government, regulators, banks and other organisations to be more supportive to small and medium-sized enterprises (SMEs).

Christine Elliott, chief executive of the IfT, said: “For SMEs and mid-market firms, the recession has re-set the business landscape for the next decade.

“Access to finance remains limited, which in turn restricts growth and limits investment into businesses, their employees and the wider economy. It is no surprise that many businesses remain dormant under  these circumstances.

Lord Jones said there was a knock-on effect to the wider economy if SMEs cannot grow and lack proper support.

“The livelihoods of the many, the tax receipts for Her Majesty’s Government and the very vibrancy of local communities can depend on the quality of such advice, on the clarity of planning and the efficacy of execution,” he said.

Lord Jones has been unafraid to criticise politicians, including former colleagues from  Mr Brown’s Government.

“Ed Balls says he’s in favour of business then plays to socialistic tribalism by putting up a sign saying ‘Don’t invest here’,” he tweeted in January.

Lord Jones has said he believes a sense of competition is healthy: “English rugby authorities want kids’ rugby to have no competition winners and teams to be weakened if they win too often. Hear that?” he said, with evident disapproval.

Ms Elliott added that “rather than turn our backs” on struggling firms, Britain should bring in government policy that would help them recover.