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Small business hampered by government

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6th May 2009
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While recessions can present opportunities for start ups, the government is crippling their progress, says small business owner Lucy Saunders.

The government is simply not doing enough to aid small businesses, despite having the perfect opportunity with this year's Budget.

The increasing divide between public sector financial security (particularly pensions), and private sector offers will draw the brightest and best candidates into the public sector and this in itself will adversely affect the economy.

The government’s commitment to fast payment, with a specific target of payment within 10 days of invoice, will benefit SMEs that supply the public sector, but won’t help early stage start ups. The requirements of the tendering process and the complexities of working with bureaucracies mean smaller businesses don’t often work with the public sector.

A 2% hike in fuel duty from September and statutory redundancy pay up to £380 from £350, will directly impact SMEs. These added costs will not be offset by the tiny increase in the VAT registration threshold, up £1,000 to £68,000.

The Chancellor also promised jobs, training or work experience placements for young people aged 18 -24 who have been unemployed for 12 months or more. Providing placements will be an added cost to business, as interns require management, training and support, the expense of which is not paid back by their labour in future.

Lucy Saunders is the founder and MD of Mahseer, a PR and marketing consultancy.

This article is an extract from an article originally published on our sister site Finance Week.
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