Has the coalition’s decision in May 2010 of a fixed parliamentary term proved a useful asset for the nation’s SMEs – or is five years too long to be stuck with an unpopular policy?
YES In my experience of business, decisions about investing, buying or selling are driven by confidence. It’s the reassurance that managers and consumers need to trust expectations about future events.
For example, will the train arrive on time or is it worth paying for a taxi instead? Will interest rates or taxes rise or fall, and how can I plan ahead for this? Will trade sanctions or currency restrictions be imposed or lifted, and is now the right time to start exporting to new markets?
None of the examples are directly related to the length, fixed or otherwise, of a government’s term of office. But a successful firm knows that planning ahead with reliable economic forecasts is crucial for developing long-term strategies for growth. A fixed-term government brings with it greater political and social certainty. It’s one less variable to wonder about.
With less than a year until the general election it’s fair to assume businesses are looking forward to the possible changes different parties would make. Yet speculation and conjecture as to whether or not the prime minister of the day will dissolve parliament, apart from in extreme circumstances, are gone.
Whichever side of the political fence you sit, such certainty, or at least such relative certainty, brings with it stability. This creates the environment for firms to make plans and inspire confidence – which, in turn, drives business.
Chris Wood is general manager of corporate clothing supplier Incorporatewear
NO I think too long a period of government results in complacency, and for directors of smaller businesses with less political sway there’s little benefit. Five years in the lifecycle of SMEs, which make up the bulk of the economy, is a very long time to be stuck with a policy you didn’t vote for and that doesn’t work for your particular industry or business.
Issues that remain burning ones for SMEs go round in circles during such a long period in government – they’re brought to the fore then dropped for something deemed more important. Late payment, red tape and business rates, for example, all get regular mentions and we hear how a new initiative is being launched to address them – then nothing happens.
I’m not convinced that the fixed term makes politicians more accountable. In my experience, during the past 45 years in business, accountability remains an issue whatever the term.
A current issue for our business is superfast broadband roll-out – a classic example of this lack of accountability. BT has taken taxpayers’ money from local councils to deliver superfast broadband to businesses across the UK. Yet many companies, especially those in rural areas like ours, get cripplingly slow broadband speeds, which seriously hampers the running of business. The government simply won’t take responsibility for this or acknowledge the fact that BT has taken taxpayers’ money and not delivered what it promised.
Richard Williams is a director of family-owned Williams Automobiles