The Business Senate for Enterprise

The Genesis Initiative was formed to improve the quality of the debate on SMEs in the UK and Europe and create economic reform, driven by SMEs and supported by Parliamentarians.

general election 2019

The Genesis 2019 General Election Small Business Shopping List

Below Genesis sets out some of the policy changes it would like to see from the next government

 

 

Provide long-term patient funding to UK SMEs the government should establish a high street national brand of the British Business Bank, fulfilling the need for patient capital and mentoring to give small businesses the confidence and skills to grow and so create jobs. While operating through local providers, the BSBB should, like the US Small Business Administration, be one of if not the UK’s primary SME finance brand. SMEs have lost trust in traditional UK banking brands. A reluctance to borrow to grow because of those issues of mistrust contribute to the limited number of UK businesses deciding to enter the growth corridor where new jobs are made, and competitiveness grows on the international stage. You can see more here  The British Small Business Bank

 

Stop online fraud through the digital platforms, recouping over 1 billion of tax revenues and protecting UK SMEs which are unfairly disadvantage by importers using third-party online platforms (e.g. Amazon, eBay and Ali Baba among others). Lax UK regulations makes it easy for those importing into the UK via the platforms to evade VAT, ignore health and safety and basic quality standards and so achieve a massive cost advantage over UK businesses and other legitimate retailers. The net result of the current situation is both a massive shortfall in tax revenues that would support government services to the population as a whole and continuing and sometimes terminal pressure on UK SMEs.Digital Platforms and tax crime online – recouping £1 Bn revenue and protecting UK SMEs Digital Platforms and tax crime online – recouping £1 Bn revenue and protecting UK SMEs. You can see more here Digital Platforms and tax crime online – recouping £1 Bn revenue and protecting UK SMEs

 

To stop the heavy-handed approach of IR 35, which is stopping UK business being able to access vital flexible expertise and is about to be made even more difficult For almost three decades, the UK has enjoyed a competitive advantage through its businesses being able to access vital flexible expertise they need to deliver projects and drive the economy forward. The intermediaries’ legislation colloquially referred to as the IR35 tax rules (IR35) undergoes another major overhaul in April 2020. The impact of the changes is likely to be highly detrimental, particularly at a time when the UK economy needs to be nimble on its feet to deal with the potential opportunities and threats posed by Brexit. Many freelancers may choose to change their businesses or close them, many businesses that benefit from using freelancers may cease to do so. The Government needs to row back on the new tougher measures and needs to give start-up consulting and service businesses, in particular, a window to get themselves established before fitting them with IR 35 rules. You can see more here  IR 35 – destroying flexible British SME expertise 

 

To strengthen the power and reach of the Small Business Commissioner Shortly before the general election was declared Genesis met with Kelly Tolhurst, Small Business Minister, and her Labour shadow Bill Esterson, to call for reform of the Commissioner’s office after the general election.

  • The Commissioner should add to their power to highlight bad practice with the power to fine; this needs to hurt and be proportionate to the size of profits of the offending late payer.
  • The Commissioner will never be able to deal with every late paying business, but a significant increase in a staff of about a dozen would greatly increase their impact.
  • Late payment practices are often tied to prejudicial contract terms and that practices which rely on the capacity of bigger businesses to bully smaller ones; the Commissioner should have a wider remit to take on some of these instances, with tribunal powers to amend or declare contract void and take action against directors behind such policies.

 

What the Parties Are Promising – General Election 2019

These are some of the main proposals for the small business sector in the manifestoes: party manifestoes

 

 

 

 

 

The Conservatives

  • getting Brexit done so that the country can focus on everything else that needs to happen; leaving the EU will allow a review of regulations on business aiming to make them more business-friendly
  • review of business rates to support the high street
  • wider tax reform to achieve simplification, no increases in income tax, VAT or National Insurance; increase R&D tax credits
  • improving the situation of the self-employed, with a review focusing on access to finance, tax and support for home workers
  • improve start-up finance for small businesses, greater recognition for women and BAME entrepreneurs
  • a new £3 billion National Skills Fund focused on SMEs, with the reform of the apprenticeship levy and matched funding available for those from the SME sector undertaking training
  • strengthening the office the small business Commissioner to clamp down further on late payment and ensuring that government both pays small businesses on time and the same small businesses get a fair crack at government procurement, supporting and encouraging flexible working, strengthening maternity/paternity leave and rights of unpaid carers; giving the right for workers in the gig economy to require a more predictable contract
  • beefed-up specialist tax evasion unit
  • a Digital Services Act, amongst other things to focus on irregularities in digital retail
  • Conservative and Unionist Party manifesto for the 2019 UK general election.

 

Labour

  • a new Brexit deal, followed by a further referendum by next July; with a Labour government mandated to follow result of the referendum
  • deal major reforms of the apprenticeship levy to make sure it is spent on accredited training; larger businesses will be a transfer on use funds to smaller ones
  • promise that no one who earns less than £80,000 will pay more tax, focus on taxing wealth rather than income, no increase in VAT
  • consider replacing business rates by a land value tax
  • reform of the Companies Act to force companies to focus on longer-term growth
  • increased minimum wage to at least £10 an hour for all workers, but with help for small businesses
  • through a new ministry for employment rights ending what it calls bogus self-employment in, for instance, gig economy; zero hour contracts to be banned and anyone doing more than 12 hours a week having a right to have a contract of employment
  • New protections and help for the self-employed
  • new equality rights with more paid maternity and paternity leave an extra pregnancy protection
  • Tough new measures against late payers, including being banned from public contracts
  • minimising reporting requirements for those below the VAT threshold
  • free fast broadband for everyone
  • Business Development Agency to provide direct and free support to start-ups
  • crackdown on tax avoidance and reform of tax reliefs
  • supporting the high street by stopping bank branch closures and giving local government the power to use empty shops
  • Labour Party manifesto for the 2019 UK general election.

 

Liberal Democrats

  • stopping Brexit
  • tougher planning rules on high Street to stop conversion of retail to other uses
  • business rates replaced by a land value tax on commercial sites; the owner pays rather than the retailer, more money for the Future High Streets Fund
  • Start-up allowances for new businesses
  • focusing on equity capital and long-term investment for growing businesses, through the reform of the British Business Bank; with a special focus on drawing in new growing businesses rather than being a lender of last resort and a focus on digital
  • protecting the position of those in insecure employment and ensuring that normal employment rights are extended to them; including former flexible working, a “genuine living wage”. Also establishing a new status of “dependent contractor” with clearly established rights.
  • Tax simplification, particularly to support small businesses, ending retrospective changes
  • Corporation tax of 20% but keeping that rate stable
  • Liberal Democrats’ manifesto for the 2019 UK general election.

 

 

 

Visiting Washington DC

IMG_5736The Genesis delegation, led by HRH Prince Michael of Kent, Founder Patron of Genesis, has just returned from a programme of meetings with Think Tanks, academics, political leaders and SME organisations in Washington DC. We went to find out what we could learn, what we could share and how we could generate new ideas together to strengthen the SME community.

 

“Through projects such as Opportunity Zones, the long-term lending schemes of the Smaller Business Administration, (this is in effect patient capital with low-interest loans over up to 25 years) plus work on entrepreneurship policy through the cutting edge of academic research, we found much to bring home,” said Genesis Consultant CEO David Harvey. “Equally we found many problems in common. Not enough small businesses are on the growth track towards employing 5, 50 or 500 people – and this is how prosperous new jobs, rather than survival jobs, are created in both our economies. Both economies have real challenges in developing enough STEM-skilled (science, technology, engineering and maths) young people. Both economies too are finding it challenging to provide the right offer for those in middle area skilled jobs in areas such as finance, junior management, hospitality, manufacturing and retail.”

 

“We found learning and fresh thinking in areas such as immigration, minority employment and start-ups, tax reform and measuring small business success. We discovered the entire patchwork quilt of policies across the 50 states of the USA and the opportunities that local knowledge and state and city government can provide with a real state-by-state localism. Equally, this localism and federalism also means it is sometimes very difficult to know what is really going in SME policy, driven and planned locally rather than from Washington DC. We saw that the success of the SME sector is enormously varied across the USA and an aggregate picture of growth and dynamism in one city shifts to decline in another. There is much here to learn for UK cities and towns and the often ignored rural and suburban areas of the UK, often feeling left behind the cities”.

IMG_5741A forthcoming Genesis report will set out ideas to borrow, use as inspiration or indeed share back with our US partners for them to do better what they do.

Genesis would particularly like to thank our hosts and partners the Progressive Policy Institute, for this collaboration.

 

 

 

Empowering the Small Business Commissioner

The Genesis Senate has discussed key proposals for the reform and empowerment of the Office of the Small Business Commissioner

 

The Small Business Commissioner was launched in 2017 to provide both scrutiny and public voice against bad payment practices. The office of the Commissioner also provides a mediation service to help small businesses, in particular, sought out ratepayers. As a member of the Genesis Board was able to report through direct experience, that service is extremely effective. “It knocks out the extra muscle which big businesses sometimes think they have again small ones that means they can ignore debts outstanding, once I involve the office of the Commissioner payment was almost instantaneous”.

However, the Senate sees two ways in which the powers of the Commissioner should be strengthened. Genesis had called for a more empowered role for the Commissioner, overseeing a number of other areas, before the post was created. In particular:

  • Businesses should be required to make full disclosure of all matters relevant to an instance of late payment to one of their suppliers to the Commissioner; and
  • Particularly where that disclosure seems to throw up little, the Commissioner should be given a direct power to mount a full investigation by going into a company, with a statutory requirement for that business to cooperate.

How can the small business commissioner help you chase late payment?

Here is the simple process you can use working through the office of the Commissioner – complain about late payment, the Commissioner Paul Uppal is active, his staff get things done.

 

The UK Minimum Wage

Getting headspace for small business issues has been challenging with the national focus on Brexit. However, the SME debate may be starting to come back to life with the competition for a new Prime Minister.

 

Genesis made this submission in June on the minimum wage low pay commission response – June 2019. Genesis SME trade associations support a minimum wage. They also recognise the need for review and uplift for those on apprenticeship and training pathways, particularly for younger workers. However, Genesis recognises that a small business owner is often the last person to take a wage packet when things are tough and that it may not take much to shift a decision to employ a new trainee towards one not to advertise or create a vacancy. Genesis noted:

  • the need to avoid accelerated increases at times of economic difficulties
  • sectoral and regional differences
  • particular challenges for low margin labour intensive businesses such as security, and
  • the cost of the national minimum wage as just one of many burdens on businesses.

 

Access to Finance 

Access to Finance Report cover_Page_v3

The Genesis Access to Finance Report was launched on the 29th of November in the Thames Pavilion at the House of Commons, hosted by Chris Davies MP and Anne Marie Morris MP. The report is based on the views of organisations, representing some 250,000 businesses, together with a range of lenders to business.

Despite concerns about a “funding gap” stopping the growth of UK SMEs,  there is funding out there in abundance. This Report brings the thoughts and the aspirations from both the borrower and lender sides of the divide together. Particularly as a hangover from the global financial crisis of a decade ago, lack of confidence in lenders is one obstacle discouraging SME’s from adopting a growth trajectory; lack of a brokerage system that could bring SMEs and lenders together to build confidence is another.

Download the Genesis  Access to Finance Report, produced by Genesis finance expert and Board member Adam Tyler and his team.

 

Genesis Response to the BEIS consultation – Creating a Responsible Payment Culturebefair_payontime

Genesis responded to the BEIS late payment consultation Creating a Responsible Business Culture. The response was initiated through the Genesis Senate at its September 2018 meeting and then finalised by a delegated working party, you can download it Responsible Payment Culture – the Genesis initiative response here. Genesis emphasised the following central points in its response:

• BEIS should focus on introducing e-invoicing technology and make it the Code of Practice standard, to move towards most payment being virtually instantaneous.
• There should be a clear definition of unfair payment terms, using the Irish Republic’s approach and adopting 30-day payment term as the legal norm, on a comply or explain basis.
• The SME Commissioner should be empowered, and the current advisory approach to individual cases should become an enforcement-based one, where the Commissioner could work in partnership with business associations through simple employment tribunal-like structures to secure rapid adjudication.

 

Making Tax Digital Report MTD cover MTD cover_Page_1

Genesis launched its Making Tax Digital report on the government’s proposals to digitise tax relationships, at a reception hosted by Mel Stride MP, Financial Secretary to the Treasury. The report can be accessed via this link MTD – Preparing SMEs to maximise the benefits  “The government’s proposals to digitise tax relationships offer a tremendous opportunity to support small businesses develop better digital skills throughout their commercial activities. HMRC needs to provide that digital’s training and support to seize this opportunity”, said Genesis CEO, David Harvey.

 

Research report  Brexit – Defending financial services in the SME sectorBrexit - Defending Financial Services in the SME Sector cover_Page_1

The report looks at the post Brexit challenges to 350,000 UK financial services SMEs, authored by the Genesis Financial Services Working Party, led by Dr David Doyle.  It can be downloaded here Brexit Defending financial services in the SME sector

Members & Supporters