UK government hampering enterprise

Apr 16 2007 by Brian Amble Print This Article

Almost two-thirds of entrepreneurs in Britain believe that excessive regulation and a poorly-educated workforce make it much harder to start and build a business today than it was when the Labour government came to power 10 years ago.

A survey by the British Chambers of Commerce (BCC) found that half (49 pert cent) of entrepreneurs felt that it was now "much harder" to set up and grow a business compared to 10 years ago, with a further one in five saying it is "a little harder".

Four out of 10 of those polled blamed inadequate levels of education and skills among the workforce while a third aid that excessive bureaucracy and red tape was the biggest issue that needed top be addressed.

The BCC, whose annual conference starts today, said that the survey highlights the fact that while the government claims to have created a dynamic, entrepreneurial and competitive economy, businesses believe that they have done the opposite.

"Businesses are succeeding in the UK through the desire and ambition of the hundreds of thousands of entrepreneurs who are battling to succeed in the competitive globalised economy," David Frost, director general of the BCC, will tell the conference.

"Politicians of all parties must not take this for granted and see businesses merely as a revenue stream to fund their spending.

"What we need is not just talk but action. Red tape needs to be cut and the education system needs to ensure that children leave school with skills that are relevant to the 21st century economy."

The government has pointed to figures suggesting that UK companies make almost as much profit as French and German firms combined and one third of the European total.

But as the BCC has retorted, it is hard to see how Chancellor Gordon Brown's extraordinary decision in last month's budget to raise the rate of corporation tax payable by small firms from 19 to 22 per cent could be seen as anything other than a kick in the teeth for business.

Meanwhile, as David Frost will tell the BCC conference, the flood of employment legislation and red tape and the estimated £17bn cost of transport congestion are further barriers to success.

"There are still too many barriers to successful business growth. Also, we now have a political approach that seems far more concerned with how we spend the money, rather than how we earn it, and a political consensus that a high level of public expenditure is a good thing, without any real concentration on value for money.

"What message does the [corporation tax] rise give to small businesses or potential entrepreneurs? "These are the people who are risking their livelihoods to create wealth and create jobs."