Believing in Britain’s Smaller Businesses - Margate conference speech

Napoleon Bonaparte once described this country as a nation of shopkeepers. Well, that was then. Today, we could be better described as a nation of builders!

 

At the start of last year, there were an estimated 5.2m small businesses in the UK, together employing over 12m people and with a combined turnover of £1.2t, according to the Department for Business, Innovation and Skills. And only just over 10 per cent are shopkeepers, or otherwise involved in either the retail or wholesale trade. By far the greater portion of businesses now, 18 per cent, operate in the construction industry. We also have a significant proportion of businesses in the professional, scientific and technical industry, in manufacturing, IT, and administration. And virtually all of us who are working in agriculture, forestry and fishing, are working for a small business.

 

 

These small businesses are the life-blood of Britain. They are a major contributor to turnover, employing 48 per cent of the workforce and create 85 per cent of all new jobs.  We fail to recognise just how crucial they are at our peril; they are the backbone of our economy and the principal driver of our labour market.

 

 

It's within our smaller businesses that we find our greatest innovators; our entrepreneurs; those plucky souls who make a decision to take control of their own future; the ones who have a vision to create, sell, or build something for the benefit of themselves and those around them. It's people such as these and the businesses they start and grow that will take us out of the economic turmoil we've suffered in recent years and back into the black.

 

 

Yet too often these go-getting entrepreneurs are not supported. They struggle to get finance to set up or expand their businesses. Bigger companies don't pay invoices on time, treating the "little man" as a money-lender, ruining their cashflow and potentially putting them out of business. And if I had a pound for every businessman or women I've heard complain about the oppressive burden of regulation, well, then I'd be a very rich woman indeed.

 

 

All these issues and more are stifling our small businesses. They're depriving business owners of the one thing that probably attracted them to setting up their own business in the first place: the freedom of being their own boss.

 

 

Well, if you're one of these people, if you're working all the hours you can to build a business you've started; if you are a wealth creator and a generator of jobs, then UKIP is the party for you. Why? Because UKIP is the only party that will liberate you from the shackles that bind you; the only party that can give you your freedom back again.

 

 

Let's talk first about regulation. Massive over-regulation by the European Union impacts disproportionately on smaller businesses. It's as if the EU is deliberately going out of its way to make life more difficult for small businesses.

 

I'll give you just one example, although there are many more: VATMOSS.

 

 

Why else would out out-of-touch Commissioners introduce ill-thought-out initiatives such as VATMOSS, for instance, which was introduced in 2008 and became into law on 1st January this year?

 

 

VATMOSS is an appalling piece of legislation that has already led directly to the death of 200 micro-businesses, and I suspect many of those will be 'mum-trepreneurs,' women who work from home, perhaps fitting their business around her family and children.

 

 

VATMOSS forces UK firms selling digital services, such as online auctions, e-books and online magazines, music, films and games, website supply and hosting services, software supplies, and so on, to register for VAT, even if your turnover is below £81k a year, the current registration threshold. You'll also have to charge VAT at the applicable rate in the country you're selling to. It pushes up your costs and your selling prices: it's more interference, more cost, more regulation, more dictatorship - precisely what small businesses don't want and don't need. Worst of all is the extra administrative burden you'll face. Registering for VATMOSS means having to:

 

 

  • Invoice for VAT (or not depending on the different rules in different jurisdictions)

 

  • Collect two pieces of non-conflicting information to prove the location of the consumer

 

  • Store that information on an EU server for 10 years.

 

  • Implement Data Protection rules and registering with the Data Protection Commissioner in each jurisdiction (and boy, you wouldn't believe how lengthy and time consuming that can be)

 

  • Create a separate legal entity and register for VAT MOSS if you don't want to lose your UK VAT threshold exemption

 

  • Comple VAT returns quarterly, or risk facing penalties in potentially all 28 EU Member state jurisdictions

 

  • Be ready for audits from potentially all 28 jurisdictions

 

 

Can you see why 200 business have gone to the wall in the last eight weeks? Perhaps it's a miracle it's not more.

 

 

I spoke recently to a small businessman in the chemicals industry who has to employ two people in non-productive roles just to make sure his company complies with employment regulations, form filling and EU bureaucracy.

 

 

Not that his problems end there.

 

 

Over the past fifteen to twenty years, he's seen niche products that it had taken him years to develop into profitable lines regulated out of existence. Excess regulation either made them too expensive to produce, or his company couldn't afford the huge cost of registering a previously nationally approved product at EU level, because the markets for his products were too small to justify the investment.

 

 

He's not alone: firms working in the health food and vitamins business, in herbal remedies, pesticides, animal health products and pharmaceuticals have gone bust, costing thousands of jobs, as a direct result of EU interference.  

 

 

Of course, all this red tape favours big business who can afford the admin staff to cope with all this massive administrative and cost burden, and for big business it becomes an advantage. Often, they lobby for new regulations, and why not, if smaller businesses are forced to shut up shop? It reduces the competition, doesn't it? No wonder big businesses and organisations that represent them like the CBI shout 'foul' whenever leaving the EU is mentioned. Their cries that we will lose jobs and be poorer outside the EU should be treated for what they really are - the sound of self-interested bellyaching.

 

 

 Outside of the EU we could - and UKIP would - ditch the dead hand of excessive regulation and EU bureaucracy. Millions of small and medium sized businesses would then be able to employ more people. Take away the barriers the EU puts up to business and I believe there'd be an explosion of growth in small to medium-sized enterprises.

 

 

Fewer than one in ten British businesses trade with the EU, yet 100 per cent of them must comply with thousands of EU laws on employment, waste management, environmental regulations, product registration, health and safety, etc. This burden is destroying small businesses and helping destroy our economy.

 

 

British businesses are better off out.

 

 

 

 

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