It's time to start listening to small businesses

Dear Mr Freeman,

Thank you for your letter. I would be delighted if I could convince myself that I would have received a similar answer at any time over the past 16 years and that this careful attention is not because we are within 400 days of a general election.

But ignoring the timing, your comments on the issues raised - employment legislation as a barrier to creating jobs in the small business sector, and the arrogance of VAT administrators - are very welcome. The action outlined regarding the industrial tribunal system and the Customs & Excise complaints procedures should be most helpful.

The action would have been even more helpful, however, if it had been taken when the serious nature of the burdens on small businesses were first brought to the Government's attention. I wonder how many of those businesses that failed would still be operating if deregulation had been initiated sooner?

Government delay

I recognise that the machinery of Government may be cumbersome and slower than we would all wish, but the problems on which you are now acting have been known about for many years.

I first wrote to the prime minister about VAT almost six years ago. The cause was taken up at the time by the press, radio, in the House of Commons itself (16 tabled questions), by Chambers of Commerce, trade associations and the Federation of Small Businesses.

There was no doubt about the intensity of feeling in the small business sector then.

Nevertheless, the minister who replied to my recent letter stressed that there had been full consultation before legislation had been put in place.

Sometimes consultative papers are put out with only a few weeks allowed for a response. A cynic may think this is because Westminster and Whitehall can claim consultation has taken place, knowing that in practice it has not.

Real discussion

How much better it would be if genuine and informed consultation took place before legislation? A year of discussion and informed debate is preferable to six years of fudge, denials, wrangling, recrimination and retroactive correction.

Surely the savings in administration, frustration and unnecessary burdens, not to mention massive financial savings, would more than justify such a process? The exercise of democracy doesn't have to wait five years.

This leads to the main point of my reply - vocational training.

There is widespread acknowledgement that this is vital to our economic success. Radical initiatives were introduced more than 10 years ago to the general approval of industry and education. But today NVQs and SVQs are not the successes they should be. The targets, lowered from those set initially, will not be met.

Left behind

Countries such as Malaysia, which followed the British model - but made sure it worked - now look set to leave us standing in the vital area of tourism and economic development. We need to ask ourselves why.

Small firms employ more than 60% of the working population. In our industry the proportion is much higher. So far, we have failed to reach these people because they were not consulted and their needs and special problems not adequately considered at any stage of the development process.

It is not too late. NVQ and SVQ systems, while not the successes they should have been, are not a failure.

But please, from this moment on, ensure that the small business sector is properly represented in all future deliberations.

It may be argued that small businesses are consulted via trade associations. This is not the case. The deliberations and policies of trade associations tend to be dominated by the major players - often the larger companies - whose interests take priority over those of smaller members.

It's vital to ensure that the voice of small business has at least an equal hearing. Without them, training schemes will not succeed as they should.