The World Bank says that a high place in the rankings – which are based on performance in nine different areas – “means the regulatory environment is more conducive to the starting and operation of a local firm”.
All of this is great news. But the results seem to be somewhat at odds with the results of another report on how the regulatory burden affects the smallest businesses.
Published yesterday, the Better Regulation Executive’s Lightening the Load report is based on the results of interviews with 500 micro businesses employing fewer than ten people.
It found that businesses were struggling to cope with existing regulations. Each new regulation or change simply adds to their problems it says, adding: “Most frequently we were told that they try to do the right thing, but felt that they were not supported and were unreasonably expected to cope with the same levels of paperwork and regulatory obligations as larger companies”.
The level of this burden is underlined by the comments of the executive’s chairman, Sir Don Curry, who says he has been humbled by the real “distress” caused to some business owners.
What emerges from the executive’s report is that small and micro businesses seem pretty low on the list of priorities for policy makers when new regulations are made, even though enterprises of this kind are where the government will be looking to drive economic growth and new jobs over the coming years.
The recent appointment of Lord Young as David Cameron’s enterprise adviser, with the remit of slashing red tape for small firms and pinpointing what needs to be done to help them grow, seems to be a step in the right direction in terms of lightening the load.
Let’s hope that our small firms don’t have to wait too long for action – although if a few hundreds or thousands more are snuffed out by a mountain of red tape in the coming months, at least they’ll have the comfort of knowing that the UK is the seventh best place in the world to close a business.
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So the government’s launch of a new and very straightforward health check to help business people spot early signs of decline on their own High Street would seem to be a Good Thing.
Also good to see is that the health check was produced with input of business organisations, traders and town centre managers drawing on their own experiences of High Street life.
It includes tips such as how to check on whether an area is attractive to customers, whether it offers good parking and public transport and looking at the variety of shops on offer, then helps them to work together to draw up an action plan to turn things around and put the plan into action.
Interestingly, the government’s guide includes some advice that goes against the perceived view of a High Street in decline. It says that pound shops, for instance, can drive footfall to other shops; some shops go, not because they are struggling, but because they are doing well and want to expand or reach a larger marketplace.
Anyone who has seen a favourite High Street blighted by empty shops and antisocial behaviour will welcome this new initiative, not least because the small, independent businesses that are the hallmark of an attractive and varied High Street are the kind of enterprises that the government is turning to to create jobs and drive economic growth.
We’ve all got a hand in making our High Streets a success by giving our local shops a chance, rather than always heading for the supermarkets, big city malls and out of town shopping centres. So if we don’t want to lose ‘em, perhaps it’s time to start using ‘em a little more.
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The research, which involved interviews with 1,204 eight to 15-year-olds across Britain, found that the average estimate for a pint of milk was £1.12, making the actual cost of around 45p seem like a real bargain.
When it came to stamps, the average cost suggested was £1.16 – rising to a hefty £1.92 in Wales – compared with an actual cost of 41p. Youngsters were also out of touch when it came to the TV licence, with an average estimate of the fee of just £10.48 rather than the actual figure of £145.50.
While this all might seem like a fun way for Halifax to gain some useful media coverage, the results of the survey raise some serious issues.
Without sounding like “It wasn’t like this in my day” grumpy old man, understanding the value of money at an early age will help to teach youngsters the budgeting skills that will keep their finances in good shape later in life.
If kids don’t understand at an early age how much things cost – nor that there’s work involved in earning the money to pay for them – their future financial road could turn out to be more than a little rocky.
The “buy now, pay later” easy credit culture has its fingers firmly in the pie of the global economic crisis and if that doesn’t galvanise today’s parents into teaching youngsters the importance of living within their means, then the financial pain so many are suffering now could all too easily be repeated further down the line.
There’s one piece of good news from the Halifax survey though. It found that 77 per cent of children wanted to learn more about saving. And that, as they say, is priceless.
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Conservative veteran Lord Young – the former trade and industry secretary and president of the Board of Trade – has been appointed by David Cameron as his enterprise adviser, with the remit of slashing red tape for small firms and pinpointing what needs to be done to help them grow.
His first assignment from Mr Cameron? To write a “brutally honest” report examining how government departments interact with and affect small businesses, something that is likely to have entrepreneurs up and down the UK cheering on Lord Young from day one in his new role.
Mr Cameron says: “There is so much more that we need to do to back up our commitment to make this country one of the best in the world to start, run and grow a small business. I am seeking nothing less than a wholesale change in attitude from my Government and I need help to get there.”
It’s a tough task but Lord Young packs a considerable punch. He knows what it is to build and run a business, having a couple of decades of hands-on experience of doing just that, and, wearing his other hat, as the Prime Minister’s adviser on health and safety law and practice, he last month published his Common Sense, Common Safety report, which clearly shows he’s all in favour of reducing burdens on small businesses and “shredding red tape”, as he puts it.
A good way to start the week then: let’s hope that small businesses don’t have to wait too long before Lord Young starts up his shredder.
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However, 38 other bids for LEP status were rejected and the opposition, not mincing its words, denounced the plans as a ‘pathetic fig leaf’. Furthermore, they come just months after the government announced the abolition of Regional Development Agencies, which played a similar role. So what can we expect from the LEPs?
A £1.4billion ‘growth fund’ has been made available by the government, which LEPs have until January 21 to bid for a share of. LEPs will be able to initiate programmes to support high-growth businesses, as well as making representations to government on issues such as planning and infrastructure projects or training issues.
The total amount of funding, however, is far less than what the previous government spent on RDAs – which the present government claims is because the new bodies will be less ‘top down’ and more efficient, but opponents argue will reduce their effectiveness.
What funding is available will not only be available to RDAs, with private groups and public-private partnerships also able to make bids. How much funding RDAs eventually get from central government may well determine their effectiveness, since it is unlikely that councils – facing their own funding squeeze – will be able to contribute significantly to their costs.
The government is also considering proposals for local authorities to keep the business rates they collect locally, rather than the rates being passed to central Government, as happens at present. This may make more money available for business development in some areas, but others could be left worse off.
How effective these new bodies will be remains to be seen but, with sources of new funding few and far between, businesses and their advisers would do well to keep them in mind and investigate what opportunities may exist in the future.
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