THE SMALL BUSINESS BLOG

In an unprecedented weak budget spiked with half truths, Mr Darling is trying to ignite a class war in the UK in an attempt to boost the Labour Party election prospects – a dangerous game to play with our fragile economy at this time.

While any real and immediate public spending cuts are delayed until at least 2011, so not to disgruntle potential Labour voters, higher earners where hit hardest again. Labour is implying a ‘well-off association’ with bankers – who are to blame for this mess – to disguise it’s attempt to ignite a class war to hide it’s total failure on the economic & political front!

Not one word about Labour comp-licitness in our current problems – it was after all our current PM, then Chancellor Brown, who was warned over five years ago of the pending problems with the credit levels in the economy. Yet, the self-declared ‘saviour of the world’, did nothing to stop this problem when it was first publicly discussed in the media.

Any attempt to help small business, can at best be described as window dressing, no deference of the re-introduction of the higher VAT rate to 17.5%, which will hit small business hard. It is worth mentioning that Labour is breaking another promise by withdrawing support for the economy before the economy has emerged from recession.

Darling announced another £500mio in an business development fund, another £500mio that will never reach those small businesses that really need this money to survive. His ‘lending guarantee’ signed with the ‘state owned’ banks has also not come to anything.

As this government is running out of money and soon people it can squeeze for more tax, the outlook for our economy remains troubling at best. We need many more small business start-ups, which in time will create better and more secure jobs, than any of the big companies ever will.

Early indications via twitter and other online social media is that more and more people thinking about leaving the UK to set up shop abroad. Many saying if Labour is returned to power, they will leave next year!

The Shadow Chancellor Osbourne said ‘Britain is closed for business…!’, a sentiment echoed by more and more small business owners.

All in all this was not a Pre-Budget Report, the was a Pre-Election Manifesto.

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Lord Sugar’s – the government’s enterprise czar – outburst last week where he allegedly called small business owners moaners and said:

“I can honestly say a lot of problems you hear from people who are moaning are from companies I wouldn’t lend a penny to. … They are bust and they don’t need the bank – they need an insolvency practitioner”

is an unbelievable insult to all small business owners in this country.

Small business owners were being squeezed by this government even before this recession started, now they have to endure this recession, which was started by the very same people who pay themselves billions in bonuses while asking for more tax payers money (30 billion) to bail them out even further.

As if this was not enough they now have to endure a verbal onslaught of a – in my opinion – half educated and half witted Sir, Lord, Czar or whatever Mr Sugar.

It is this community of small business owners who keep this country together:

• over 50 % GDP is being produced by this sector
• over 50 % of employment is generated by this sector
• over 60 % of innovation comes out of this sector

Given these numbers may I ask what percentage of the money that this government has wasted so far has gone to the SME community? It is most certainly not anywhere near 50%! These ‘moaning’ SMEs have probably paid more in taxes, which then have been used to bail out the banks and the government, than they have received in financial aid.

SME don’t borrow money anymore because they cannot trust the banks and they cannot afford to borrow the money. While the Bank of England has lowered the interest rate to the lowest level on record, the banks have doubled the interest they demand from small business owners, up to almost 20% for certain loans – that is a 19.5% spread.

As I mentioned in my CNBC interview last week, these high interest rates take all the profit margin out of the business that can be done out there. Let me spell it out for anyone who really has not got the picture, businesses go bust because:

• The banks will not lend money to them;
• Even if they lend the money it is so expensive that it takes any profit out of the deal;
• They run out of savings.

I am furious that Sugar is insulting the SME community in this country in this way, like the rest of this government, he has lost any sense of reality. The spin coming out of the Brown government is as unbelievable, as it is insulting to the general public.

Who the hell made Sugar a Lord anyway any why? Sugar certainly is the icing on the government’s cake of incompetence, if nothing else, IMO. -ST.

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From today to October 18th is National Identity Fraud Prevention Week – so why should you care?

One of the side effects of electronic commerce is the identity fraud, and as of yet nobody has come up with a secure system to do business electronically. To make electronic transactions as safe as possible requires knowledge of the the problem and some advice on how to behave in certain circumstances and this is exactly what this campaign is aiming for.

You should care enough to read on @ stop-idfraud.co.uk.

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