Sunday, November 20, 2005
Ha ha Enterprise week
Entrepreneurs need ministers to stay out of the picture.
By Jeff Randall
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The source of my debilitating condition was reading that Enterprise Week - a campaign to bang the drum for Britain's start-up businesses - had been strongly endorsed by... yes, you've guessed it, the Government.
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Even more hilarious was learning that Alan Johnson, the trade and industry secretary, had told an Enterprising Britain Summit in London on Monday: "We need to back our entrepreneurs, not hamper them. We need to praise them, not knock them."
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Oh, behave! For sheer, unadulterated cheek, this matched the kid who shot his parents and then begged the court for leniency on the grounds that he'd been made an orphan.
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When it comes to hitching free rides on passing bandwagons, few organisations canout perform New Labour. Yet even by the party's own high standards for shameless opportunism, this attempt to bathe in the glow of Britain's wealth creators redefined chutzpah.
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The four business entities behind Enterprise Week are the Confederation of British Industry, the British Chambers of Commerce, the Federation of Small Businesses and the Institute of Directors. Frankly, I'm amazed that they've allowed the event to be hijacked quite so brazenly by a government whose idea of a good day's work is a positive headline in tomorrow's tabloids.
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So, before New Labour's spin-machine sends us home dizzy, let's remind ourselves that only three months ago, a CBI report concluded that this government had missed most of its targets to nurture small businesses.
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The CBI was particularly critical that ministers had failed to build an enterprise culture in the UK, create a positive environment for growth, improve regulation and encourage entrepreneurs in disadvantaged areas.
Of course, it wasn't meant to be like this. In his March Budget, Gordon Brown promised to cut red tape, and offered the prospect of "a light and limited touch" for business regulation. With an election less than two months away, the Chancellor was keen to reassure self-employed workers and fledgling businesses that New Labour was a flexible friend. It sounded good - Brown's patter often does.
The trouble is that you could fit the Treasury and all its fixtures and fittings in the gap between his rhetoric and reality.
Underwhelmed by what Brown has done since for small business, the CBI's director-general, Sir Digby Jones, said recently: "How can an enterprise economy break through when the Government presides over systematic, stifling red tape, a discredited planning regime and a society that becomes more politically correct and risk averse by the day?"
On this theme, the CBI's president, John Sunderland, told his members at last year's conference: "On average, each business in the UK is subject to 85 separate health and safety regulations (many more if rash enough to produce food and drink). It is fair to say that the present regulatory burden is a regressive tax on small business." The British Chambers of Commerce is no less scathing. A report earlier this year, commissioned by BCC and compiled by London and Manchester Business Schools, put the cost to business of 46 separate pieces of legislation introduced by this Government at £15billion a year.
At the time of the report, BCC's director-general, David Frost, said: "As well as the cost, firms tell us that they are spending too long dealing with paperwork, trying to get their heads around each and every regulation."
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No surprise then that the UK Business Barometer, run by the University of Nottingham's Institute of Enterprise and Innovation, found that a quarter of companies questioned had deliberately stopped growing their operations to avoid the impact of New Labour's employment regulations.
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So when you hear ministers blethering on about fostering business at grass-roots level, encouraging young people to start companies and freeing entrepreneurs from the burdens of administration - as the Chancellor did yesterday on BBC television - remember the following: This is a government that knows so little about real enterprise that Johnson's predecessor, the witless Patricia Hewitt, went out of her way to defend MG Rover's "Fab Four", claiming that the risks they had taken (almost nil) justified their rewards (shedloads).
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On the night Rover eventually collapsed, it became obvious to those of us reporting the story that Hewitt's grasp of detail was so weak that she couldn't differentiate between administration, receivership and liquidation.
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This is a government that presides over more than 500 quangos - dubious bodies such as the British Potato Council - at least 100 of which have appeared since New Labour won power in 1997.
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Funded by billions of pounds of taxpayers' cash, they devour the value that is created by risk-taking entrepreneurs. This is a government that thinks it's a good idea for companies to be forced to offer six months' paternity leave, a move that BCC has warned will be "an administrative nightmare". This is a government that threatens to reform our welfare system but continues to fund 2.7m people on incapacity benefit, even though David Blunkett, when he was work and pensions secretary, described the system as "crackers" - and with good reason.
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There are four times the number of people claiming incapacity benefit today than were being paid invaliditybenefit 30 years ago. This is a government that has created battalions of public-sector jobs while imposing cutbacks on our armed forces. Many of these state positions are beyond parody, yet they are paid for, in part, by additional taxes on private-sector businesses, the very enterprises that the Chancellor keeps telling us that he's keen to encourage.
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This is a government that has turned the raising of stealth taxes into an art form. Few politicians in the world could, as Brown did, push up National Insurance Contributions - a payroll tax - and still say with a straight face that business taxes had not been increased.
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If this government's ministers were really serious about promoting enterprise, they would simply get out of the way. No chance of that, though: they might miss a picture opportunity.
¶ Sunday, November 20, 2005
