What do SMBs need from the new Prime Minister?

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A month into his new job, it’s more important than ever that the new Prime Minister of the UK, Boris Johnson knows what SMBs need from him and acts accordingly.

With our newest prime minister only announced at the end of July, and two months to go until Brexit is due to take place, things are a little turbulent. Recent figures from the Office for National Statistics also found that the UK economy has slowed down for the first time in six and a half years, bringing about fears of a recession. In the midst of this chaos, the needs of SMBs, especially those on our high street, simply cannot be forgotten – they have a variety of needs that must be met.

First of all, Boris Johnson needs to recognise that SMBs make a significant contribution to the UK economy – they employ 99.9% of the private sector economy, a total of 16.3m people around the country. Likewise, last year, British SMBs collectively had an annual turnover of £2 trillion, making up over half of all private sector turnover. These figures clearly show the importance of SMBs to the UK – and our new PM should acknowledge this.

Advocate for lower business rates

Often in times of economic uncertainty, SMBs are hit the worst. Given that the high street is currently struggling, SMBs more than ever before need the financial support that would result from reduced business rates. Recently, a number of large retailers, including Marks & Spencer, Harrods and Iceland, have demanded tax cuts from the government in the hope of saving the high street. Andy Street, former Managing Director at John Lewis, believes that the current system is “detrimental” to SMBs.

At the same time, there needs to be a clearer way of communicating with SMBs about what actual policy is in place. Currently, this is quite complex, and is made worse by the fact that the UK lacks a comprehensive system for dealing with business rates – instead, it varies between England, Scotland, Wales and Northern Ireland. This adds to the confusion, and can be overwhelming for SMB owners; many of whom are lacking any spare time and don’t need this added stress.

Making the entire process easier for SMBs would indicate that Boris Johnson is taking them seriously, and would show that he acknowledges that running an SMB is far from easy.

Communicate clearly

Similarly, our new PM cannot assume that SMBs will have the time, staff or resources dedicated to spotting changes to trade and employment laws. The ever-evolving political climate will have an impact on legislation, and therefore SMBs must be kept in the loop. They need to know how the legislation will impact them – before they’re caught out. The information available online can be a legal minefield; one that SMBs shouldn’t have to explore in the hope of finding some relevant answers.

For example, the Financial Conduct Authority recently announced an 18-month delay to the introduction of Strong Customer Authentication (SCA) rules, after debate and confusion over whether retailers were ready to adapt to it. While it is helpful for SMBs to have more time to prepare, it’s important that in the future, businesses have a longer lead time. Until this delay, it was due to go ahead in mid-September, which wouldn’t have given many the time they needed to make the changes.

Avoiding major confusion is critical. SMB owners and employees shouldn’t have to worry about changes to the law – especially when they are following rules they were unaware that changed. At the same time, clear communication from the PM, along with the wider team of ministers, would be a sign of mutual respect, showing that they don’t want SMBs to be caught out.

Boris Johnson also needs to be clear about the implications of Brexit. There’s no doubt that the handling of Brexit is top of his agenda. However, a 2018 study by the University of St Andrews found that SMBs could be the worst hit by Brexit. Dr Ross Brown, who led the research, said: “There appears to be a deep-seated uncertainty permeating UK small businesses about the ramifications of Brexit.” Mike Cherry, National Chairman of the Federation of Small Businesses, highlighted that delays to Brexit negotiations have already had a negative impact on SMBs. “They are the ones dealing with the realities of this mess – planning decisions cancelled, investment stalled and growth going backwards,” he said.

The government must help the SMB community navigate this time of great flux. Boris Johnson and his government must maintain regular and clear communication with SMBs. This is essential if he is to ensure the disruption is managed as well as it can be.

Recognise the role of SMBs in society

The new PM mustn’t just respect the pressures facing SMBs – they should also value the significant role they play in the UK. Boris Johnson needs to look at SMBs not just from an economic lens, but also acknowledge their presence in British society on a wider level – and particularly in local communities.

Looking past the statistics, SMBs have the ability to shape communities, influence local services, and also provide spaces for people to meet and socialise. They are absolutely crucial to the country’s economic success. Therefore, the government needs to be working on how to make their lives easier and allow them to be successful.

Author: Steven Stewart, director, SMB Solutions, Valitor.



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