Starting up in business in 2012: how this government is encouraging people to go for it

I set up my first small business after having been a partner in a major firm of accountants and consultants for a number of years. One day I was surrounded by sophisticated accounting and expenses systems, secretaries and administrative support; the next I had to do it all myself. I remember my then business partner and I going to our first sales pitch and ending up afterwards in a rural post office in Kent where the manager kindly let us have a table on which to stuff envelopes with our first mail shot and post them. Setting up your own business can be a lonely affair and it is nice when someone's on your side.

As this was the dark days of the last Labour Government, I knew that the then Government was not on my side. How much easier life would have been, for example, if the previous Government had been as serious about cutting red tape as is our current Government. Mark Prisk's article today on Conservative Home reinforces this point: http://bit.ly/zxSJDc. Red tape not only costs cash; it costs time. That is something you do not have lots of when you are setting up your own business and when you need to keep your focus on winning new work.

For all businesses, of course, cash is king. Being experienced in international trade, I set out to ensure that each year at least half our income was generated in foreign markets with which we were familiar, including the Middle East. Good prices; but perhaps with more difficult cash flow implications! To be fair, our bank was reasonably understanding at the time but something like the National Loan Guarantee Scheme would have helped. Under this scheme, the Government will allow participating banks to raise up to £20 billion of cheaper funding over the next two years under a Government guarantee provided that the lower cost of funding is passed on to small businesses.

Finding funding other than from the banks has always been a problem for small businesses. Schemes like the Seed Enterprise Investment Scheme which provides tax breaks on investments in early stage start-ups would have been something we would have seriously looked at to encourage venture capital and diversify rather than rely purely on bank loans.

If Government measures to help get money in to the business would have helped us, so would measures to limit the money going out. For many small businesses, business rates make up a significant chunk of expenditure. Doubling small business rate relief for two and a half years is a measure which I know from small businesses in my own constituency has brought real help. And when it comes to tax, a combination of the corporation tax cut for small businesses to 20%, the doubling of tax relief for entrepreneurs and the simplification of the tax system are all most welcome.

Whether you set up your own company or you chose the route of self-employment, this is not just about the Government encouraging growth and business for their own sake and that of the economy, important though they are. This is also about encouraging aspiration and helping those that wish the exciting challenge of living their dream through business to do so in the knowledge both that Government is on your side and that the Conservative Party has MPs who understand what you are going through because they have been there and done it.

John Howell OBE MP is the Member of Parliament for Henley and PPS to the Leader of the House and to the Minister of Decentralisation and Cities. He was formerly a partner in Ernst & Young before setting up two small businesses in the media sector.

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