How will the Chancellor's autumn statement impact on small and medium size Businesses?
The University of Birmingham asked leading academics from across the campus for their expert opinions on this week’s Autumn Statement and the likely impact it could have on everything from taxes to local service provision, the high street to personal wealth.
Professor Kiran Trehan discusses the impact on SMEs and diversity.
Small and medium-sized enterprises (SMEs) are the key to economic growth: a loud refrain heard from all quarters in the UK these days. The Chancellor is under increasing pressure to ensure the autumn statement addresses the concerns of SME’s in relation to Business rates, energy costs, access to finance and changes in public sector procurement processes. At the same time, discussion will increase about the possible increase in base rates from the current record level.
As with finance, difficulties in accessing markets and doing so consistently are faced by all SMEs as well as minority ethnic businesses. However, weaker networks can make market access even more difficult. With a lot of SMEs in particular still reliant on public sector work, including through local authorities, commentators will be looking to see if Mr Osborne is relaxing his spending plans in any way and encouraging public sector agencies and large corporates to adopt a range of procurement policies which could make a real difference.
This is unlikely on a net basis. Rather, he is likely to stress the benefits to business from curtailing spending in terms of keeping future taxation and interest rates down. However, often forgotten is that by announcing local authority spending levels the Government will also be setting rate bills for years ahead. The most like outcome is that the current freeze on business rates and exemptions introduced in the recession will continue for another year.
We can also accept the announcement of a refreshed small business strategy. Expect ideas around more support for growth orientated SMEs, especially those involved in exporting, and some response to Lord Young’s report on Small Firms earlier this year. This could well include announcements on developing further industry-higher education links, building growth hubs to support SMEs and an update on the British Business Bank. The big question remains ‘Will this be enough?’ to satisfy the needs of our SMEs, in our order to ensure their survival, innovation, and economic growth.
Professor Kiran Trehan, Professor of Leadership and Enterprise Development at Birmingham Business School, University of Birmingham