The United Kingdom over the past decade has been an extremely hostile environment for businesses, especially the smaller concerns. Numerous government initiatives have added ever increasing layers of bureaucracy, additional costs, and inefficient time wasting requirements. All this is underpinned by ridiculous levels of legislated Political Correct ideology that adversely affect a UK business to efficiently operate or even to employ suitable staff. This article provides an overview of the resultant problems, with some solutions, and a conclusion that the UK is itself heading towards bankruptcy.
The title of this piece mentions UK businesses very purposefully, as the current climate in the UK for a number of reasons is not business friendly. This was the case prior to the recent credit crunch, but the full impact of global fallout from collapsing financial markets has increased the unique pressures to UK small businesses to intolerable levels.
The problem is that the state can adversely interfere in the running of businesses both big and small through ideology and policies. This is especially prolific with the current UK government, and is generally one way traffic – the plethora of government initiatives and policies over the past decade have led to increasing business expense, time wasted, and inefficiency. Ironically this can directly lead to fewer profits, and hence less tax collected by the government; ultimately a business can fail.
This can be illustrated by an example of a small business, say a shop, with a turnover just exceeding the VAT threshold, and a part time employee. The owner needs to be proficient and conversant to a working knowledge level at: Corporation Tax, Value Added Tax, Pay As You Earn Employee Tax, Personal Tax, National Insurance, Business Rates Tax, Local Council Rules, Health and Safety Regulations, and Anti-Discrimination laws to name the most obvious few.
The system is so complex that the civil servants administrating often do not fully understand the system themselves. The UK tax system appears designed to give the country’s wealth creating business owners as much additional work as possible, for which they are expected to work unpaid. Half this money is redirected to the 5 million plus adults in the UK on full time benefits, so they can continue to do nothing in return for the money!
Then of course there is the ideology of Political Correctness. The tentacles of this inherently inefficient beast have wrapped itself around the core of businesses both large and small. PC ideology simply does not treat people as individuals, but as collective groups who must superficially be treated as equal, but with some select groups more equal than others.
What is not often questioned, and should be, is the simple fact that businesses are primarily interested in efficiency and hence profit levels. If they can gain a 5% increase in profits by employing hypothetical green Martians with pink polka dots, they probably would! Much of the pointless PC nonsense is forcing businesses into daft employment practices. Examples are numerous, a few include:-
Being forced by legislation to employ pregnant ladies for heavy lifting, and having to pay somebody else to do the job on a temporary basis, pending her decision on maternity pay post birth on whether she wants the job or not.
Ridiculous Health and Safety regulations, with ever increasing layers of bureaucracy in undertaking the simplest of task (watering hanging baskets, using a step ladder, ad finitum). Small business owners can end up physically undertaking tasks their staff could easily and more appropriately do, rather than risk a huge law suit in the current litigious climate.
And what can one do with laws that forces employees to employ totally unsuitable people, such as a butcher required to employ a person who refuses to touch pork for religious reasons or a supermarket/off licence forced to employ those whose religious beliefs disown alcohol. The no win scenario is complete in allowing these individuals unlimited damages if they are requested to undertake those tasks essential to the business, or conversely if they are treated differently from the other employees who end up covering their work!
There are ways and means of ensuring the success of a business despite the numerous government created obstacles to the contrary. A business owner needs to use considerable skill and develop expertise in tax and government admin matters; assisted by information technology and the use of appropriate expert advice. There are obvious common sense precautions to reduce Health and Safety risks to a sensible minimum.
Business owners need to choose suitable staff to efficiently do the job – not fulfil government quotas or ideology. Headhunting, selecting known individuals, and utilising unadvertised recruitment methods are routes businesses are forced into by current government policies that do no allow choosing on merit. The salient point is that the current UK government has legislated for inefficiency, and does not appear to care that many businesses go bust as a result.
In the final analysis, a successful business owner in the United Kingdom is an amazing beast, a survivor in the truest sense of the word. The danger for the United Kingdom is that successful business owners are increasingly recognising that they would be better off to locate their business outside the UK. If the UK continues its business unfriendly policies in conjunction with encouraging as many people to live off welfare benefits as possible, this can only lead to the eventual bankruptcy of the United Kingdom.
For further information on this article see http://www.dluk.info/biggest-enemy-uk-business.html