05 November 2010 #Employment
Now is a good time for SMEs to put the Government to the test in its commitment to "Back Small Business", set out in its strategy document with that title, released this week. This follows the review of employment laws to be led by Lord Young also announced this week. Lord Young got attention by proposing an increase in the qualifying period for unfair dismissal claims to 2 years (see our blog "Return to 2 year qualifying period? Smaller employers encouraged to be brutally honest.")
The Government cites the measures it has taken already, including reducing corporation tax on small profits to 20 per cent from April 2011, getting the new "Office of Tax Simplification" to simplify small business tax plus the introduction of the rather intriguing "one in, one out" principle promising not to introduce new regulation without abolishing existing regulations with a net cost to business. Clearly that is one to watch.
The Government has pledged that in the weeks and months ahead it will develop policies to turn the following strategy commitments into action:
We will, of course, be closely following and, as far as possible with the help of our clients and contacts, seeking to influence development of policy on the above. There are some interesting commitments so far to the development of a network of "growth hubs" investing £200m in a network of elite Technology Innovation Centres and proposals aimed at achieving the goal of 25 per cent of government contracts being awarded to SMEs, where procurement spending totals £236 billion.
An interesting fact highlighted by the BIS strategy paper is that a mere 6 per cent of UK business with the highest growth rates generated 50 per cent of the new jobs created by existing business in the period 2002-2008. The success or failure of the Coalition Government`s budget cuts will depend to a large extent on whether this story can be replicated or bettered in the years ahead.
Lord Young has promised to report back to the Prime Minister by Spring 2011, so, again, let us have your views.