Big is beautiful: Small companies should not take priority over large ones

There is no moral or economic advantage in having a new job created by a small or medium-sized business over one that grows out of a big company

Share

Every government pledges to cut red tape, and every government in living memory has failed to do it. So the Coalition is to be congratulated for bucking that trend, and without any great fanfare about a “bonfire of controls”. Better still, the Prime Minister told the Federation of Small Businesses yesterday that more rules are to be culled; 640 pages of cattle movement guidance, 286 pages of hedgerow regulations and 380 pages of waste management rules.

Sounds good, but that half-jocular reference to cattle should remind us that regulations must be ditched with the same care as we would wish to see when they are introduced. After all, it was a previous bout of deregulation that gave us the BSE disaster, which virtually destroyed the beef industry. And when the rules about what the world’s banks could and could not do were ripped up in the 1980s and ’90s, financial crisis and the worst recession in a century eventually followed. Deregulation is to be applauded, then, but only if it is conducted wisely.

Meanwhile, what of the Opposition’s plans for a Small Business Administration? The shadow Business Secretary, Chuka Umunna, stresses that Britain is “the only G8 country without a state-backed investment institution”. Should this be a priority, though?

Not necessarily. Fetishising small business, any more than any other kind, is not smart, and distorts market signals. Practically speaking, creating new quangos and tax breaks and subsidies in one particular part of the economy merely adds bureaucracy, and indeed new red tape, to our already over-complex tax code – the opposite of that the politicians say they want to achieve. There is no moral or economic advantage in having a new job created by a small or medium-sized business over one that grows out of a big company.

The plucky, hard-working entrepreneur has a strong emotional appeal, of course, and one that Conservatives are especially susceptible to. Yet government, and opposition politicians, might be better off aiming to lower the tax burden for all enterprises – as well as making some well-known multinationals start paying tax in the first place.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Recruitment Genius: Photographer / Floorplanner / Domestic Energy Assessor

£16000 - £25000 per annum: Recruitment Genius: A Photographer/ Floor planner /...

Ashdown Group: Front-End Developer - Surrey - £40,000

£30000 - £40000 per annum: Ashdown Group: Front-End Developer - Guildford/Craw...

Recruitment Genius: Customer Service Assistant

£13500 - £15000 per annum: Recruitment Genius: A Customer Service Assistant is...

Recruitment Genius: Sales Executive - OTE £35,000

£16000 - £35000 per annum: Recruitment Genius: An ambitious and motivated Sale...

Day In a Page

Read Next
 

Letter from the Whitehall Editor: The spurious Tory endorsement that misfired

Oliver Wright
 

General Election 2015: Ed Miliband hasn’t ‘suddenly’ become a robust leader. He always was

Steve Richards
Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence