Autumn Statement: What Osborne needs to do to keep small businesses happy
The chancellor will reveal the government's economic plans on Wednesday 25 November - here are the policies entrepreneurs want to see announced...
On Wednesday 25 November, chancellor of the exchequer George Osborne will reveal the government’s updated plans for the economy in the 2015 Autumn Statement.
With widespread speculation that Osborne could be about to scrap entrepreneurs’ relief – the tax incentive which allows entrepreneurs to pay less capital gains tax when they sell a business – in a move to save £3bn, the statement could bring bad news for small business owners.
If the chancellor goes ahead with this plan, he’ll need to introduce and expand more measures to keep the UK’s small business community happy – but just what exactly?
We questioned a group of fast-growth start-up and small business owners to find out just what policies they want the chancellor to announce on Wednesday and here they are…
1. Provide more regional business support
DataSift CEO, Tim Barker, wants to find out how the government plans to help more businesses across the UK – not just those based in the capital:
“In next week’s statement it would be great to get an update on how the £11m investment in tech incubators in Manchester, Leeds and Sheffield is progressing, as well as the planned devolution of more regional powers. It’s important to recognise that innovation and entrepreneurship is not just limited to London, so have the plans to help build a successful business ecosystem nationwide started to come to fruition?
“It’s also incredibly important that we see some more incentives for entrepreneurs put in place especially as there are rumours circulating that Entrepreneur’s Relief is set to be abolished. We need to encourage the next wave of tech stars and entrepreneurs to step-up and create their own businesses.”
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2. Create initiatives to resolve the UK’s skills shortage
Mark Furness, CEO and founder of essensys, is calling on Osborne to address “the growing chasm in skilled technology workers”:
“The UK is likely to face a barren few years on the technical skills front. Whilst we’ll still need to ride out a difficult time, there needs to be immediate action to develop the UK’s technology skills for the future. When I look at the kind of talent coming out of other countries, like Vietnam for example, we’re falling behind with each passing day.
“A nod to coding on the curriculum just isn’t sufficient, there needs to be wholesale change to ensure technical skills are baked into every aspect and every layer of the UK education system.”
carwow CEO and founder James Hind agrees:
“The main issue slowing the development of fast paced business is recruiting people with correct skills (especially developers, business intelligence etc.). Short term solutions – making it easier and quicker for smaller companies to take on overseas staff, medium term – perhaps some sort of government-backed recruitment agency that works via the British council to pre-interview and screen non-UK tech applicants then matches them up with fast growth UK companies. Long-term = giving the next generation in the skills we have in shortfall (writing code, interpreting large datasets etc.)”
3. Abolish Stamp Duty on shares
Asset Match founder, Stuart Lucas, wants the government to get rid of stamp duty on all shares traded in entrepreneurial businesses and growth companies. Lucas explained:
“The abolition of Stamp Duty on growth markets last year helped boost investor participation but only for quoted companies and ignored private businesses and start-ups. Under the current rules, HMRC still lays claim to the duty on share purchase transactions involving UK private companies that are not quoted on AIM or ISDX thus creating the odd situation where an early-stage private high-growth company will attract Stamp Duty, but one listed on AIM or ISDX will not.
“With more and more companies looking to alternative finance to raise money, such as crowdfunding, many investors in these companies are being penalised for trading shares simply because they are private. Unless stamp duty on private company shares is abolished it will start to hamper the recycling of capital into growth companies and will hold back the development of the market for early stage equity.”
4. Incentivise banks and lenders to help small businesses grow
Arina Osiannaya, director of the Business Funding Show, wants the Autumn Statement to help start-ups and small businesses “continue the good work” of “fueling economic resurgence in recent times”:
“The government must take measures to help foster their growth. This means increased lending from the banks at favourable rates and with flexibility around repayments. I would also like to see the government incentivise funders to provide longer-term loans to businesses showing growth potential.”
5. Boost alternative finance
Fundbird co-founder and CEO, Sharon Argov, hopes the statement will bring about a serious conversation on small business financing in the UK; specifically alternative finance:
“Although small and medium enterprises continue to bolster the growth of the UK economy, we are now starting to see worrying reports of a gap between their ambition and current productivity.
“Despite a raft of negative headlines highlighting the impact of late payments, our data shows that the majority of small and medium firms seeking alternative finance are doing so to fuel expansion and growth. It would be a terrible shame to stifle this potential through a lack of available finance. Of course, simple availability of finance is not the whole picture – more must be done to support and coach small businesses through the many options available to them, to ensure they are able to confidently explore all the alternatives to traditional bank lending.”
6. Offer greater training opportunities
Nigel Botterill, founder of Entrepreneurs Circle, says greater training must be at the heart of the government’s small business policy this year:
“Less than half of new businesses will survive five years; only 16% will exceed £500,000 turnover. Why? Because entrepreneurs lack the experience to effectively scale-up. The reality is that only when equipped with the knowledge to effectively manage your figures, recruit staff or undertake effective marketing will your venture flourish. It is working smarter, not harder, that counts.
“The government has made some positive steps: the £20m business training scheme, established in 2013, provided specialist training to small businesses in rural areas. Yet given there are now 5.4 million SMEs in the UK, current efforts barely address the tip of the iceberg. For our entrepreneurs and regional initiatives such as the Northern Powerhouse to succeed, much, much more in the field of mentoring and training must be done.”
Do you agree with these entrepreneurs? Or do you want to see different measures announced in the Autumn Statement? Share your thoughts and “wish lists” in the comment box below…