Full marks to David Cameron for saying that he wants “nothing less than a wholesale change in attitude” from government towards small business. He then goes on to appoint the doughty Lord Young to be his enterprise Tsar. Lord Young was Margaret Thatcher’s Trade and Industry Secretary, manufacturing industry was decimated on his watch! What is Dave thinking about? The small business Tsar needs to be a dynamic ‘go-getter’ who understands about small business. It needs to be someone who knows what it’s like to do business in today’s world, not some old dinosaur – no offence to Lord Young.
Lord Young’s appointment demonstrates that the government does have a serious attitude problem when it comes to small business. I suppose this is understandable when so few ministers have had any business experience. Is it a left-over from the days when being ‘in trade’ was just not done that it has never been given proper attention? Maybe it’s because the prefix ‘small’ has had the effect of diminishing its importance in people’s minds? Whatever the case, successive governments have been ‘small thinkers’ when it comes to small business. That must change.
Making noises about red tape is just meaningless waffle. If we really want to grow and generate wealth, we have got to have a completely new approach to small business. Small business needs some big ideas. Here are three of mine:
- Education. The vast majority of people who start a business have a good idea and great enthusiasm, but no formal business education. They learn ‘on the job’ which is inefficient and dangerous. We need to invest in ‘Business Education Centres’ that offer entrepreneurs the opportunity to learn about business, avoid pitfalls and encourage new thinking. Attending a five year education programme could be linked to government loan guarantees or something similar.
- Business Banks. Current banks do not answer the needs of small businesses. Their behaviour over the last two years speaks volumes. What is needed are ‘business banks’, banks who only lend to businesses, large and small. The state should be major a shareholder in these banks to ensure that businesses are ‘positively advantaged’.
- Growth Capital. For small businesses to be able to grow and prosper, they need to have access to capital. Venture capital is very often ‘vulture capital’, expensive and complicated. The government needs to have a ‘Business Growth Capital Programme’ that allows businesses access to inexpensive capital.
David Cameron could put these ideas – or something similar – into action within six months if he really pulled his finger out. The benefits of ‘positively advantaging’ small businesses in this way would be huge: time to turn small thinking into big thinking?