Crystal Umbrella

Small business minister, Mark Prisk has set out his plans to revolutionise the support systems for entrepreneurs in the UK.

His first action could be to axe the regional offices of Business Link. Prisk stated this would be his intention back in February, prior to the General Election. Business Link costs £190m per annum to run and it is expected Prisk will reach a final decision on its fate within the next two months. In their place, start ups and small companies can gain support and advice from existing enterprise agencies. Meanwhile knowledge and advice for higher growth ventures will come courtesy of ‘growth hubs’ which will be set up across the country based on the Business and Intellectual Property Centre at the British Library. Prisk’s overall aim is to increase face to face contact while cutting costs.

Prisk commented: “I remain very sceptical about the effectiveness of the existing regional Business Links and that is why I am examining them very carefully.”

He also out lined his online plans, stating: “I am keen to make sure that the intervention government offers is a modern service and that means a strong emphasis on it being online, so that it is accessible on every business person’s hand-held and desktop computer.”

Mr Prisk has also stated that he wishes to spend five days working at five different small businesses across the country and will be encouraging his civil servants to do the same.

Speaking on this topic, he said: “If I am going to be an effective voice in government and indeed the voice of government to business, then I need to better understand the current issues affecting small firms. So I intend to spend a full working week with small businesses.”

Prisk, 47, previously ran his own chartered surveying firm for ten years so his background is in business. His tour of British businesses will begin in Bethnal Green, East London at DIY Kyoto – a firm which makes energy meters and has an annual turnover of £1m. Its founders are Richard Woods, Joe Sawdon Smith and Greta Corke. This will be the first of two businesses Prisk will visit in his constituency.

Further to these visits, Prisk will be assisted by the Federation of Small Businesses whose assistance he has sought to find work placements for himself and his civil servants.

Mr Prisk has also set forth plans to allow individuals who rent council houses run businesses from home as there are currently rules which prevent them from doing so. Prisk is prepared to legislate on this matter if necessary. He said: “I have already talked to my ministerial colleagues at the communities and local government department and we have agreed that we want to remove the restraint on being able to establish a business.”

He continued: “Obviously we don’t want to remove sensible regulations on noise and nuisance but we do want to make sure that tenants can reasonably start a business just as any other occupant would be able to do elsewhere. I want to crack on with it as soon as we can.”

Concluding this issue, he commented: “In some areas, where it is written as a firm guideline, we may need to change the law. In other areas it comes down to the guidelines of individual housing associations. The key thing is to work with those bodies out there at the moment. I think many of them recognise that this is one of those hangovers from the past that actually they would like to change.”

It is also in his plans to extend the Enterprise Finance Guarantee scheme which was originally introduced under the Labour government. The purpose of this scheme is to provide government guarantees for loans made to small businesses by banks. Currently the scheme is set to end in March 2011 but Prisk would like to see it extended beyond this term. He would also like the size of individual loans available under the scheme to be increased. This would open the scheme up for medium sized enterprises also. Currently small businesses are able to apply for loans of between £1000 and £1m with terms of between three and ten years. The total guarantee offered by the scheme is for £500m. Prisk is aiming, in extending the scheme, to encourage banks to be clearer about the decision making timescale regarding loan applications.

He stated: “One of the things most small firms talk to me about is not the speed of the decision-making but the lack of certainty. One of the crucial changes is to make sure we get a more certain decision timetable…that allows you to plan.”

He concluded: “If you don’t know whether the decision is going to come in week three or week seven, it is hopeless. That element of greater certainty is a crucial part of reforming the Enterprise Finance Guarantee scheme over the next year.”

As we await the manifestoes from the UK’s main political parties in the run up to the general election, Gordon Brown has confirmed his belief that the gap in the UK skills set should be filled by focusing on links between training the UK workforce and the points based system.

The prime minister admitted that the UK is currently failing to meet the demand for tier 2 specialist workers which includes engineers and IT workers. However, he did say that by advertising jobs locally and training IT workers in the UK, there had been a reduction in the number of migrant workers taking up these positions. In fact, this had fallen from 99000 Tier 2 workers in 2007 to 81,000 in 2008 and a further fall to 63,000 in 2009.

Mr Brown also confirmed that the new Border Agency will use improved methods to stop people at the borders including biometric visas, ID cards and electronic border controls. He also disclosed that local immigration teams will be in place by next year who will target employers suspected of employing illegal workers and undercutting minimum wage and gangmasters.

Tom Hadley, director of external relations at REC (The Recruitment & Employment Confederation) commented: “The availability of staff is crucial to the success of the recruitment industry, and the companies they supply.  If immigration is tightened up too far then the recovery could be at risk.  REC will continue to monitor the impact of immigration changes on recruitment through our specialist sector groups.

He concluded: “The continued focus on ensuring companies do not employ illegal migrants is welcomed.”

The country is waiting patiently for the Chancellor of the Exchequer to deliver his Budget Report on Wednesday 24^th March, particularly in light of its proximity to the expected general election in the coming months. However, contractors who are hoping for to benefit from in this Budget will probably be left disappointed. IR35 has long been a contentious issue but despite the oppositions pledge to overhaul the taxation system to make it fairer for all, it is unlikely that Alistair Darling is set to follow suit. In fact, in terms of taxation, it would appear that the only changes in the imminent Budget will be a delay in the planned rise in Corporation Tax for small businesses. Contractor groups have been lobbying on the issues relating to IR35 and compliance for some time now but, as yet, these campaigns have failed to effect change.

It seems the reason tax cuts are particularly unlikely to be announced next week is due to the massive debt currently strangling the UK’s finances. The Prime Minister has already spoken out to confirm that there is a need for the public sector to become more efficient but the likelihood is actually that this means there will be large cuts in public spending, although such announcements will probably be made after the election, therefore will be dependent on which political party is in power. As of next week, we will have a better idea of the financial position over the coming twelve months if Labour win another term.

The Chancellor of the Exchequer, Alistair Darling, has confirmed that ‘Britain’s Budget for 2010′ will be delivered on 24^th March which means that he now has less than two weeks preparation for what may or may not be his last budget, given the looming general election.

The budget date was announced by Mr Darling in a ministerial statement yesterday and this detail was later reiterated by the prime minister during a separate speech. The date of the budget will draw further speculation that the general election will be held on 6^th May as has long been expected. The belief now, however, is that the economy will be the main issue which the political parties will fight over and essentially seek to gain votes over. Setting the scene, Gordon Brown spoke yesterday to argue that a Tory government would further risk the UK economy whereas economic recovery would be protected by a Labour government. The week following the budget will surely see these arguments played out in parliament.

The expectation is then that the prime minister will approach Buckingham Palace following the Easter weekend to formally announce the general election. The announcement would then be made two weeks before the GDP figures are released.

Labour have pledged to do “whatever it takes” to safeguard economic recovery with a focus on “protecting and advancing the recovery”. The prime minister also stated an intention to ensure “Britain can succeed in new industries”.