An Open Letter To Our Prime Minister, David Cameron

Houses of parliament

I eagerly watched the election coverage and comprehensively read your manifesto. The Conservatives election promise of “Change” and that of the Liberal Democrats of ” A fairer Britain” have compelled me to write to you in this way and raise some important points on how I believe you could create change and a fairer Britain for over 90% of all businesses in the UK. These points take in to consideration the fact that the majority of businesses within the UK are small businesses. There therefore needs to be specific guidance and legislation put in to place for these businesses, instead of only for the selected few large & multi-national corporations.

I think it would be difficult for you to be unaware of the burden that SME’s have had to shoulder since the Governments’ action in order to bail out the Banks. Thanks to the sacrifices made by many these banks now enjoy plentiful profits and bonuses – a stark contrast to those whom have financed their survival.

Outlined below are the issues that I consider to be most pressing in order to help SME’s and by increasing the success of small businesses will help to improve the UK’s economy on the whole:

1. Project and Order Financing: Banks need to be made to provide the needed finance for SME’s in order to fulfill contracts and orders. Any growth financing needed in this respect should also be financed. As SME’s represent over 90% of all UK businesses the level of finance available to them should reflect this accordingly.

2. Legal Security and Fairness: The United Kingdom is a place where any person – whether in business or not- should be able to live in a situation of legal security and fairness. This is, however, removed from our current reality. I would like to draw your attention to proposals made by HMRC, which could see accountants being forbidden to give even basic financial advice to their clients. This penalises small businesses, which can ill-afford to pay out for expensive legal advice. This puts bigger businesses at an unfair advantage over their small business counterparts. HMRC – and any other government department – should ideally operate a free information service, which provides free written and binding advice to the public as well as to businesses. The proposed changes in legislation are divisive and give small businesses little chance of success.

3. Reduce Red-Tape: As an extension to the above point, reducing red-tape will not only help keep business competitive, but will also allow the Government to make the savings that are so urgently needed to get us out of the financial crisis we find ourselves in. In order to appreciate this, it is necessary to realise that even the smallest of businesses are operating in a Global economy.

In order for the full economic potential of our SME’s to be realised they must be able to operate on an equal footing with emerging markets. It is also imperative to understand that each time new regulations are created without consideration to the impact these will have on small businesses, these businesses automatically become less competitive in the global economy. This is not only detrimental to the small businesses themselves, but also to the UK economy. This practice weakens our economy and has to stop.

4. Invest in the UK’s Digital Network: Given the way the election was played out, the political establishment must be aware of the importance of our digital network. We not only live in a global but also in a digital economy. In order for SME’s, who generate of 50 % of Britain’s GDP, to participate in this digital economy and export their products and services through and via the Internet, it is necessary to be considerably more ambitious in terms of the bandwidth and speed of internet access which is available across the UK. This will allow an increasing number of people to work from home, run businesses from home and decrease pressure on other parts of our infrastructure, such as motorways and the rail-system. Our digital network is not only our digital highway, but also our business highway for future GDP growth.

I am acutely aware that it would be unwise to spend a significant amount of money at a time when the main priority must be to reduce the UK’s deficit. It would, however, be possible to incentivise business to invest in these infrastructures. Having built one of Europe’s largest ISPs in the 90’s I am certain that a good, long-term, business model is possible in order to finance such a super business highway

5. Fair competition: Within the UK, SME’s generate over 60% of new innovations – innovations that are fundamental for Britain to grow and do business in the future. I consider it fair and just that equal opportunities are given to SME’s when it comes to public sector projects. In the interest of fairness it is necessary to end the practice of giving projects only to large multinational corporations – which often fail or run massively over budget – while better and more innovative solutions are available at a fraction of the cost. SME’s are British businesses; they cannot move their Headquarters with little warning, something that often happens with multinational companies. SME’s are loyal to Britain; it should be the British Governments’ duty to return that loyalty.

SME’s employ 50% of our private sector workforce; it would therefore be reasonable to expect that a 50% share of public opportunities are secured as jobs within the SME sector.

6. Invest in Small, Not Big, Business: Governments have the tendency of supporting multi-national companies such as General Motors whose management teams struggle to understand how the markets are moving and are mainly concerned with increasing their profit. Every time one of these businesses is propped up with public funding, new innovations are being killed off by keeping these inefficient and badly managed corporate giants afloat. It is my opinion that investing in research and innovation within both the SME sector and universities would be a significantly better way for the UK Government to spend its money. Our economic future relies, and is dependent upon, innovation – not wasting money upon old-fashioned business models.

The mortality rate of SME’s in the UK is still over 50% within five years of start up. Implementing the changes outlined above would go a long way to significantly reducing this extortionate mortality rate. These actions would not only benefit SME’s but would also improve the British economy; boosting GDP and reducing unemployment. A system to bring about change to Britain while creating a fairer society needs to focus on our SME’s who are, without a doubt, the lifeblood of the British economy.

I am doing my part and hoping to do the “Right thing!”

Stefan Topfer

CEO WinWeb.com

To the readers of my Blog, please contribute to this discussion; add any additional points, and tell me if you agree, or even disagree, with any of the points I have outlined above. Let’s get this on the agenda, build some momentum and help bring “Change!”

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