Small advances threatened by red tape

Apr 3 2003 By Peter Jackson, The Journal

Small is beautiful. I'm referring, of course to businesses. Where once the emphasis was on encouraging and sustaining the bigger enterprises, particularly if they were inward investors, now the belief is that it is the SMEs that should be encouraged.

And this has to be a good thing. After all, small businesses will eventually grow into big businesses, with all the wealth and employment they bring. Remember, it was not so very long ago that Sage was a small business.

A cynic might claim that current market conditions are successfully creating lots of small businesses out of large ones and that the likes of ICI, BAe and BA will soon be joining the ranks of the SMEs.

But seriously, these are hardly auspicious times for any size of business and young small businesses are particularly vulnerable.

However let's not be too gloomy.

At least there has been a cultural sea change in favour of the small entrepreneur. It would be going too far to say that the small businessman and woman in the UK enjoy the same status and regard as the peasant farmer in France, but we are getting there. There is, if not an understanding of their needs and problems, at least a growing realisation of their importance.

Look at the number of organisations, whether government or private which have been set up to provide support and advice for the SME sector. From Business Links to Trade Partners and from the banks' small business advisers to business clubs, there is a whole network of support for the man and woman operating in what can seem like a terribly lonely world.

And in terms of the technology, things are much easier for the entrepreneur starting out than they were even 20 years ago, when it was highly unlikely a small business would have a computer, a fax machine, a photocopier or even a mobile phone. Now, without much capital outlay a small business can offer a really professional service.

But not everything gets better, and regulation, whether stemming from London or Brussels, is a serious handicap.

This red tape appears to be a particular problem in the fields of employment and health and safety.

I recently attended a health and safety course and I was left convinced that no small operator could possibly stay within the law and stay in business.

The course featured one film on the true story of the manager of a fish processing plant in Scotland. One day at work, he realised he had left something at home - a mere five minutes drive away - so he went to get it. On his return, he found that two teenagers had been larking about in a forklift truck in which the keys had been left, with the result that one was injured. The company was fined and we were assured that the manager - an obviously decent man - had been lucky to escape a jail sentence.

And I thought our prisons were full.