Business people ask for little other than to be able to operate on ‘a level playing field’

Over the years I have noticed an increase in the impact of holidays, sporting events and other national celebrations on doing business in the UK. Come Easter it seems as though someone has fired a gun and then, as a nation, we metaphorically prepare to pack our buckets and spades. This year, though, we are experiencing the phenomena ‘with bells on’. An additional bank holiday, the Euros, the Olympics followed by the Paralympics added to the usual menu of Wimbledon, the ever growing number of cricket matches and so on.


What the impact of all this is depends very largely upon who you ask. The more optimistic will argue that all this activity encourages people to stay at home and spend their money here rather than on one of the Costas or some Greek Island. At the other extreme those with a somewhat curmudgeonly disposition might argue that all this jollity is more likely to result in hell and damnation raining down upon us all. If you work for Transport for London I guess it’s an opportunity to threaten strike action unless their employer’s handover payments additional to already agreed overtime rates.

For most employers the only choice is to manage the impact as best they can within the confines of the already penal legislation governing employment. No one seems to be too concerned as to how all this affects them and now, joy of joys, we find that they are also required to compensate staff struck down by disease or injury, whatever the cause, whilst they are on holiday. Goodness knows what those dear people in Brussels will think up next.

Actually I enjoy all these supporting occasions as much as the next man, and it was a delight to take part in the Diamond Jubilee celebrations, but I do strongly believe that we need to consider the impact of all this on small businesses in particular. Business people, and I don’t mean the greedy few that are regularly featured by the national press as being representative of the business community, ask for little other than to be able to operate on ‘a level playing field’.

Our competitors in other parts of the world look upon our employment laws with incredulity, the Americans simply do not comprehend how businesses on ‘this side of the pond’ can afford to allow such generous holiday entitlements. Nonetheless I am not arguing that entitlements be reduced, just that the employers obligation to compensate staff for being sick whilst on holiday be wiped from the legislation. It is, frankly, nonsense.

ECONOMY, ECONOMY, ECONOMY...

A great deal has been said about the current economic climate, probably too much, there seems to be an ongoing competition amongst experts and the press as to who can come up with the most dire forecast. One says things are bad another says it’s worse. This may serve to burnish certain egos but it does nothing for consumer confidence and certainly doesn’t do anything for the majority of businesses that have been well run. In Hertfordshire we are fortunate to have many companies large and small that have set the standard in terms of innovation; companies that have been developed using sound business practice; companies have been run responsibly. Whilst some will need to tread cautiously they remain viable and will continue to be source of wealth generation and employment.

In any period of challenge those that have the ability to demonstrate clear thinking will come to the fore, thrashing around for one solution after the other is not the answer. The problem is within the financial system not, by and large, within the run of the mill businesses that most of us know and understand. Of course they are affected but it is not a problem of their making left to their own devices with sensible levels of financial support they will continue to succeed.

What is needed is a period of reflection enabling the myriad of initiatives to work, the seemly endless drive to fill column inches or airtime must come to an end. In the same vein the apparent need by some to provide justification has to cease. We all have a good idea what went wrong and where the blame lies. It will be the innovative non-financial businesses that will get us out of the problems that face us we are calling on politicians, regulators and the financial press to clear their heads and ensure that an environment is created that will enable them to so.

Getting the message across...

My colleague David Frost at the British Chambers of Commerce has certainly stirred up a hornets nest with his description of the outcome of BCCs most recent quarterly survey. Frightening, awful were just a couple of the adjectives he used. Personally I am concerned about the seemingly endless queue of people lining up to tell us how bad things are but, nonetheless, can understand where he is coming from. Things are certainly not as we would wish them to be.

I would prefer it if we all drew breath and allowed time for some of the measures that have been put in place to work. The reality of course is that until the banks start doing business very little is likely to change but, at least, the announcement by Lord Mandelson that there will be further funding to support lending should help. Following fast on David’s words I am sure he will claim that the BCC were instrumental in speeding up this process and, in fairness, so would I. Indeed it is correct to say that the British Chambers have led the debate throughout and I wouldn’t mind a small wager that they will be the first to call the recovery too.

Balancing the requirements to encourage government action and the need to protect business interests is not always an easy trick but the BCC has generally trod the line with a high level of expertise.

Looking forward it seems to me that one of the key messages arising from the problems in the economy is to learn the lessons. The current economic conditions not only cause difficulties but also identify, and amplify, some of our existing shortcomings.

As we fall down the OECD skills tables one cannot help thinking that if we are to continue attracting high levels of inward investment we will have to raise the level, and relevance, of the skills we seek to give our workforce. Despite announcements of redundancies there are still vacancies but sadly many require skills that we are short of, skills to support the engineering, electronics and pharmaceutical industries to name but a few.

If we are looking for some good news it is that we have many innovative and creative businesses with growth potential, we simply need to find more effective means of supporting them.

Oh dear, yet more employment legislation! The Government that claims it wants to help business strikes again!

Let me begin by saying that in 2008 any business that is able to be and doesn’t have a flexible approach to its staff is missing a trick. Good employers, generally, have a more effective workforce and reduce costs by retaining them for longer. If being flexible helps an employee, and doesn’t have a deleterious impact on the business, surely it makes sense to be so. Good employers have long since recognised the benefits of being flexible and therefore there is no need to introduce legislation to make them be so. It leads to better performance and gives them edge over those who are not.

The problem with legislation is that it has a disproportionate impact on smaller businesses and takes away the ability to apply commonsense. It must also be said that it does not discriminate between good and bad employers. Good employers will follow it diligently but nevertheless occasionally end up facing the unfairness of Industrial Tribunals and, in any case, incur the additional costs of implementation. Frankly, bad employers will ignore it.

It seems to me that this government has got so wound up with political correctness and an apparent wish to interfere in all aspects of our day to day life it has failed to understand that reasonable people can rub along perfectly well without their constant intervention. Legislation may keep some people on the rails but at the end of the day most of us will be good (most of the time) and some people will be bad. We do not require the State to constantly tell us what is right and wrong and how to behave.

Since it came to power in 1997 this Government has stated that it wants to support business – at best it has been inconsistent. I am not sure that this legislation would be welcome at anytime but at a time when business people across the country are trying everything they know to sustain a future for their businesses the announcement of yet more legislation should be condemned. It really does appear that the only answer this government has to life’s challenges is yet more legislation.

To paraphrase Albert Einstein “Continuing to do the same thing and expecting a different outcome is a sign of madness”.

It’s a funny old world or is it?

Just when you think you’ve seen it all something else happens. A government with a Prime Minister who made his reputation pursuing Miss Prudence starts throwing money around like a lottery winner, the Governor of the Bank of England declares that nationalising the banks is an option and RBS/Nat West announce that they are going to start doing business again.

Let’s get the last point out of the way straight away. Well done RBS/Nat West, let’s hope that the others follow their example sooner rather than later. Unless and until all banks return to doing sensible business any hope of recovery is nothing more than a pipedream. I don’t mean returning to the target driven recent past where lending at any cost appears to have been the norm but a return to what many of us of a certain age would have regarded as “good business”. Sensible lending where all concerned understood the risks and where clients knew where they stood.

As for the Governors aside that nationalising the banks was “an option” something clearly needs to be done to get the them “out of neutral” but, as things stand at the moment, it would be difficult to say who would be worse, our under fire bankers or our government.

As for the measures announced this week by the Chancellor let me say that I, like everyone else in the country, really, really hope they work. Do I think they will? Well that’s another story. Actually I am far from convinced and certainly question some of the measures announced. Reducing VAT 2.5% might have some marginal impact but given the level of discounting one already sees on the High Street and elsewhere I really can’t see it having much effect.

What concerns me greatly is the thought that as the economy is recovering businesses will be hit again by increases in National Insurance. I know the so called “giveaways” need to be financed but raising NI thresholds is a measure which will ricochet around the system like a stray bullet. Adding costs to employing individuals will add to wage pressures and make businesses even more reluctant to take on new people.

Ultimately, of course, its always business that pays and I acknowledge some good things in the Chancellor’s statement. Reversing the decision to charge empty premises tax for which we have been campaigning for some time, is welcome and the increase in funding for the Small Firms Loan Guarantee Scheme (as long as the banks get behind it) will have some impact.

Overall though the statement brought out my curmudgeonly side (not usually far from the surface anyway) and I am inclined to view it in the same light as most budgets in recent memory. A mixture of “smoke and mirrors” and we’ll all pay for it in due course. If it does the trick though, along with everyone else I will be delighted.