The new priorities should be to cut red tape and improve communications infrastructure, say business leaders
When Sajid Javid, the new business secretary, announced last week that he planned to cut £10 billion of red tape, the response was mixed. While small and medium-sized companies would especially benefit from reduced regulation, there was scepticism in some quarters that the new Conservative government could keep its promises.
“We’ll believe it when we see it,” Simon Walker, director-general of
the Institute of Directors, says. “I was very encouraged [by the news] but I also remember it’s 30 years since Michael Heseltine talked about wanting a bonfire of regulations. We’ve had endless commitment and very little delivery.”
Sacha Romanovitch, the chief executive of Grant Thornton, the financial advisory firm, said the new government needs to reconsider whether the current regulatory framework is fit for purpose. “Regulation is there to maintain integrity in markets and companies so that consumers can be confident that what they’re buying is going to be trustworthy and the businesses that they’re dealing with are operating according to the rules of the land,” Romanovitch says. “But we’ve got a number of [regulations] that get in the way of growth.”
The worst offenders are often new rules coming down the line from Brussels, Walker says: “European Union regulation has been a huge problem for business in this country, particularly for smaller businesses. The five costliest EU regulations cost about £15 billion to £20 billion a year and the benefits of those regulations are absolutely minimal.”
Though opinions differ about the impact of the proposed referendum on European Union membership – prime minister David Cameron plans to hold the vote by the end of 2017 – it may push through welcome reforms around regulation, Walker says. “Members do want to have a referendum and they do want to win the referendum to stay in a reformed European Union.”
In the more immediate future, the main priority for the new government should be improving critical infrastructure to help to bolster business growth. “The single biggest problem is the lack of access to broadband. We’re constantly hearing about small and medium-sized businesses who are having to move or are whose prospects for expansion are limited by inadequate broadband access,” Walker says. “It’s a far greater priority than high-speed rail – than HS2, for example. There is no doubt in our members’ minds about that.”
Our business is customer service
It took a deep snowfall in February 2013 for Kate Lester, founder of courier franchise Diamond Logistics, to realise her company’s communications infrastructure wasn’t up to scratch. She found the solution with Vodafone.
“All the trains were down; Surrey was completely snowed in, ” says Ms. Lester. “This meant staff couldn’t get to the office to man the phones and there was no way of diverting calls remotely.”
Missed calls can be a costly business. Ms. Lester has calculated that each one is worth £600 to Diamond Logistics.
So the company implemented Vodafone One Net Business, which integrates landline, mobile and desktop phones in one cloud-based system. If calls aren’t answered in the office, they ring through to mobiles. “People get to speak directly to the people they need to speak to,” says Ms Lester. “We may deliver parcels but actually our business is customer service.”