The big lie at the heart of the 2024 budget

The biggest lie in yesterday's #budget was that the broadest shoulders would bear the greatest burden. In the business world at least, nothing could be further from the truth.

Just like her supposedly #conservative predecessors, this #labour chancellor has chosen the easy route of targeting SMEs (owners, managers, and those who work in them) for the majority of the government's tax rises. Effective lobbying from public sector unions and Big Business means no commitments to productivity improvements, and no changes to corporation tax on profits. This, combined with a stealth-tax-only approach to "ordinary working people" (?!) means that once again SMEs, small farms and family businesses are the least well defended and least well represented in the recommendations made by treasury officials, and the decisions make by politicians. Easy prey.

Perhaps we should not be surprised. We live in an era of professional politics, where fewer and fewer of our politicians have ever had a 'real' job, much less started a business and created jobs. They don't understand the vital alchemy of small business, they have a narrow and skewed view of how capital works, and have no comprehension of what it means to put in 80 hour weeks to create something from nothing; for yourself, for your family, and for your employees. When they say they've "listened to business" what they mean is they've had a cosy chat with Google, a few city hedge funds, and the CBI.

But SMEs account for 99.9% of the business population, three-fifths of employment, and around half of the UK's entire private sector turnover. So while this budget may not have been anti-corporate, it was most certainly anti-business.

It's important to understand that the interests of small business and big business often do not align. For example, increased regulation has long been a positive lobbying strategy of large corporates, creating competition barriers to smaller, more agile challengers. And while annual investment allowances and R&D tax credits apply to both large and small businesses in principle, how many small businesses in the services sector, for example, are actually able to benefit from these complex arrangements?

While no business would welcome a rise in corporation tax, it would have had a far more proportionate impact on those businesses most able to pay (broadest shoulders, anyone?). Instead, we have made employing people (especially part-time and younger workers) more expensive. SMEs have been loaded with increased employer's NI, raised NMW, hiked costs of employing young people in particular, the halving of the NI threshold, and the virtual abolition of what used to be called Entrepreneurs' Relief over the next couple of years. Each of these (and a whole range of other non-fiscal burdens) has a disproportionate effect on SMEs. For those SMEs who are keeping significant numbers of people employed but barely breaking even (hospitality, for example?), it looks like a budget purpose-built to send them under while leaving big business virtually untouched. A strange set of priorities for a supposedly left-wing government.

With equally appalling treatment from both the major political parties in this country, it's hard to see what can be done to restore the UK's once proud position as one of the best places in the world to start and grow a small business. With each budget our economy feels older, more corporate, more sluggish, more public-sector heavy, and less entrepreneurial. No-one would deny the importance of investment in improved public services, but targeting small businesses for the majority of the funding is grotesque.

Napoleon once famously described Britain as "a nation of shopkeepers". He meant it as an insult, but we accepted it as a compliment. Our politicians apparently now see it as a fault. While continuing the attack on SMEs may have only a limited short-term economic impact, it further undermines our priceless cultural heritage of small-scale entrepreneurialism. It is an act of long-term economic vandalism on our SME sector that means we can look forward to a less dynamic, less agile and less enfranchised economy in the future as a result.