developing revenue streams
scheme, for example, was not submit- One strategy would be to allow VAT pay- supported a Private Member’s Bill in the
ted for six weeks after the announcement ments to be deferred for up to 6 months, Commons that would make small busi-
and was not cleared until the end of Feb- so that cash would be retained longer ness rates relief automatic. And to com-
ruary. There have been delays, too, with without recourse to bank borrowing. plete the attack, we have made a costed
the European Investment Bank’s £1 bil- Practical considerations over ac- proposal to cut corporation tax for small
lion fund that was announced last Sep- counting for the funds generated would companies to 20% rather than the 22%
tember. By the beginning of March 2009, suggest that there should be a lower limit announced.”
only £200 million had been allocated. to the size of business which could ben-
Just because the Government has an- efit – Mark Prisk believes that ten staff
nounced an initiative, it does not mean should be the threshold. A 1% reduction
New sources of SME revenue
that the scheme is working. Ministers in National Insurance contributions for So much for the fiscal considerations:
mean well, but their policies have not employers with five or fewer staff would businesses have to be making a profit in
been translated into clear action.” increase cash availability amongst the the first instance on work being under-
smallest operations, however. taken before they start qualifying for
Different approach needed
concessions such as reduced corpora-
tion tax. There has to be a drive at all
The Conservative Front Bench is ready
Untapped opportunities
levels of small business to generate new
to criticise the programmes being rolled There are untapped opportunities within sources of invoiceable income.
out because it believes that it would the present fiscal structure for SMEs to There is, for example, the £150 billion
have handled the situation better. retain cash. “Under half of all small busi- worth of Public Sector expenditure on
By setting up the first schemes as far nesses are claiming rates relief of up to goods and services which is inaccessi-
back as September, it would have had £1100. On the Conservative web site, we ble to many SMEs, as Mr Prisk explained.
them delivering support by the year end. have been encouraging qualifying “A significant barrier is that companies
Most of the Party’s proposals were businesses to enter their postcode and require three years’ trading before they
geared to helping businesses cut costs lodge a claim with their local council. are entitled even to pre-qualify to bid for
and free up alternative capital resources “The process was taken a step further public sector contracts.
rapidly. at the beginning of March, when we “Allowing an SME to carry forward its
pre-qualification status to other public
sector contracts would lower that hurdle.
Setting a £50,000 upper limit to the value
of a contract covered by such a scheme
would ensure that smaller businesses
were not trying to swim out of their
depth.”
The Conservatives have already
claimed that their policies and strate-
gies for recovery are ‘demand-driven’:
they intend to deliver services which
respond to the expressed needs of the
business community. They are keen to
encourage those running SMEs to come
up with suggestions for what a new gov-
ernment should do “to make the UK a place
for the future”. §
Barriers to small companies attempting to pre-qualify to bid for public sector contracts. Reducing the
three-year accounts period to one year for contracts under a certain limit would provide a major boost.
The Informed Executive
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