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Slow down the rate of change
The avowed aim of the Chancellor for the last 10 years has been to encourage investment. So, as he will shortly move jobs, it’s a good time to point out that many of his measures as Chancellor have done little to implement that aim. The same could be said of some the decisions of the government as a whole.
The abolition of the Hotel Buildings Allowance, announced in his recent Budget, together with the increase in small companies tax, will not only deter new investment but will take £80m every year out of the profits of those very small companies the Chancellor says he wants to encourage.
It is doubtful if this issue is at the top of the agenda of the soon-to-be prime minister but it should be. Reducing investment incentives and taxing more harshly is no way to raise standards, improve quality and introduce facilities that match the best in the world.
A letter to Tony Blair from a Sunday Times Business Doctor, pointed out another huge anomaly in the government’s stated economic strategy, which claims to help make Britain’s businesses more efficient and more productive.
In the last 10 years the Labour government has enacted over 180 separate pieces of legislation that are employment-based. They have affected all employers but, bearing in mind the structure of the hospitality industry and its preponderance of small employers, they affect hospitality and leisure businesses as badly as any. The letter claims 83 per cent of all businesses employ fewer than 10 people (which mirrors the structure of the hospitality industry) so this tide of regulation creates huge problems for what are effectively one-man bands.
These small businesses are so small that they have to be totally preoccupied with satisfying customers’ needs. Yet they also have to concentrate on the many new government regulations as they continue to pour in. It’s difficult enough for major groups, with head office specialist teams, to understand and comply with the new demands; for small businesses, it’s almost impossible. A survey has revealed that small businesses spend an average of 9.5 hours a week dealing with employment law alone.
The BHA, with other organisations, has lobbied hard and long on these issues to try to reduce their impact (does the Better Regulation Commission still exist? It’s had precious little impact so far) yet still the tide continues to roll as if government assumes that small businesses have an infinite capacity for absorbing – and implementing – all the measures that government wants to introduce.
So the first thing that the new Prime Minister should do is to slow down the rate of change, ensure that what is introduced is sensible and helpful, and remember that small employers – on which the economic vitality of the regions largely depend – must be given the time to look after their customers and their own business as well as implementing government legislation. That’s what he should do. But don’t hold your breath.
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