Mind the acorns
INDUSTRY GEORGE MICHAEL
Who cares about small companies? Well, small companies do—passionately. But nobody else seems to give them a proper thought. The Government, when it notices them at all, sprays them with a kind of fiscal insect repellent : a disproportionate tax, an anomalous training levy, a restriction on their directors' earnings. The Opposition offers little present or prospec- tive protection. And even the CBI is said (not altogether fairly) to show insufficient sorrow at their woes.
But it looks as if things are beginning to change. The Ministry of Technology recently started a modest experiment, subsidising small companies' employment of management con- sultants. The thin end of the Wedgwood Benn, no doubt, and it may not get much thicker. But it is a gesture. Someone cares.
The Conservatives, too, devoted a section of their pre-Conference policy paper to how they would help small firms. It consisted of two sentences-32 words. At about the same time
the cat published a whole booklet on the sub- 'MI ject, and got upset when someone wrote com- plaining that it was a matter they had hitherto ignored.
Suddenly, small companies are getting a bit of attention. It is still not the attention they deserve. They may be of little importance in- dividually; but take, say. 80.000 little concerns and view them as a single industrial unit and you get some idea of the strength of the move- ment. A fat slice of the nation's labour re- sources, including some of its most skilled men; a wealth of capital equipment; an immense productive force. How nice of the authorities to notice them occasionally!
The truth is that apart from those few recent sops, small companies have been and still are being neglected quite wantonly. They are scattered, disparate and almost impossible to organise into a lobby, so they have been over- looked. Nobody knows how much is produced collectively by companies employing up to 250 people, so nobody cares much if they go to the wall. And that is what many are about to do.
Industry has had a harsh time in the last few years, and the small man has suffered more than the others. A managing director employ- ing, say, 30 people making engineering com- ponents can get very little pleasure from life. He probably started the company because he was an individualist with the will to succeed; he fancied himself as the leader of a team, producing good quality bits and pieces and run- ning his own show. And today he sits at a desk covered in Whitehall forms, the paralysing bumph that besets the exporter, the employer of apprentices, the payer of SET, the maker of profits . . .
The least sign of recession hits him hard. Bright ideas for expansion must be put to one side because there is little to plough back once taxes have been paid. Capital is almost im- possible to raise. He must just slog on, trying to keep the business going, trying to get his big- company customers to pay their bills, trying to keep his men employed. And at the end of the week, having spent sixty working hours (a typical figure) as a do-it-yourself tax expert, personnel manager, works director, chief accountant and export manager, he has earned about as much as a Midland car assembler.
But there is more to all this than personal misfortune. The prosperity of small companies is important to economic health: they are key customers of, and suppliers to, major in- dustries. They offer skills and flexibility that big companies cannot consider providing and given the right conditions they are boldly ex- perimental. Ask a big company to produce a short run of an unusual component and it will refuse; ask a tiddler and it will improvise and deliver. (You can be pretty sure about the de- livery date, too. Small companies rarely have labour problems: their employees identify themselves with the company's prosperity. No wildcat, blackmailing strikes).
How about efficiency? There is a common sneer about the general inefficiency of small concerns, but I have never found much to justify it. On the contrary, I should say it was high—a boss who knows his workpeople well and can keep tabs on all of them probably gets better results than a managing director with 2,000 on the payroll. There is less opportunity for skiving or covering up.
Small manufacturing companies are, then, a national asset that should be encouraged. They may bother tidy-minded civil servants, but industrialists acknowledge their worth. Now it is up to the politicians, and they will have to produce something better than the Tories' promise of a Small Business Development Bureau and vague mutters about 'amending socialist tax laws.'
The first step should be a full-scale survey. of small businessmen's problems and needs; the next should be quick action before too many of them shut up shop. In the meantime, they could be given a kindly word or two about how good it is to havc them around. After years of kicks and repression they would take heart even from that.
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