Conservatives would have us believe that excessive bureaucracy and red tape exists only in the public sector. They’re wrong. I’ve been helping to run a small business for eight years and seen how layers of excess corporate bureaucracy – or “blue tape” – can put the public sector to shame.
But more importantly blue tape in all its forms – from complicated supplier agreements to byzantine accounts departments that make it impossible to chase invoices – damages the economy. It’s especially problematic for small companies and something that Labour can tackle alongside final recommendations by the Small Business Taskforce (SBTF) released last week.
Only recently a FTSE 100 client of my small firm demanded we fill in a new online form about the training services we offer.
The exercise, riddled with over-complicated questions and hosted on a poorly-built website, was time consuming and a distraction for a company of limited resources. The big client was inflexible about the tight deadline. Oh, and they already had the information in their records.
Blue tape discriminates against small business with few employees. My business can’t afford to employ people dedicated to form filling. Too many (though not all) FTSE 100-size businesses seem blind to the difference between an small business supplier and the resources of a firm with fewer than 10 employees.
Big businesses imposing blue tape know the supplier has to bend over backwards to keep their business relationship. They have no incentive to make life easier.
Labour, founded to look after the interests of the worker, can and should be the party that small businesses naturally turn to. Tackling needless corporate bureaucracy is especially important for the smaller businesses that make up half of our economy.
How can we achieve that? In its final report the SBTF advocates halving the time small businesses wait for payment from large business. It suggests ‘naming and shaming’ late payers while publicly praising those who pay on time and favouring them for both national and local government contracts.
We could widen the criteria to favour large companies who are small business friendly – a form of small business fair trade scheme. As well as prompt payment we could consider paying fair prices and fair terms and conditions, including minimising reasonable levels of bureaucracy. These should all be criteria for a FTSE 350 company to win a small business fair trade endorsement and to further its chances of winning government business.
The task force has included proposals to help government combat the bureacracy it imposes on small business, such as completing and publishing a bottom-up review of HMRC processes from a customer perspective and other ideas to smooth and simplify administration. Big business can and should consider how it can put similar common-sense ideas into practice. But it will take a Labour government to push these ideas forward rather than a Conservative-led government seemingly unaware of these issues.
Jeremy Adams helps run a communication skills coaching business in London and previously covered the banking industry for a decade as a journalist.