Sunday, July 11, 2010


Whilst there is a massive public relations exercise going on by WAG to persuade everyone that the business community is wholly behind the new Economic Renewal Programme (ERP), there seems to be a growing disquiet amongst the vast silent majority of small businesses in Wales that they have, to use an academic term, been shafted.

If you read some of the comments on this blog last week, it is clear that there is increased concern that small businesses in Wales will be left by the wayside in the drive for a sector-led economy where civil servants are under the delusion that it will be large firms creating the jobs of the future.

As one commented, the Department of Economy and Transport "need to thoroughly explain how help for SMEs will change and how much help they will gain/lose as a result of the ERP. Basically, show how SMEs if they will be better off of not."

Given the way that the needs of the small business community in Wales have been largely ignored by this consultation, one has to ask whether small firms have any voice left at the highest levels of government in Wales, as it seems to be the opinions of larger firms - and the organisations which represent them - which dominate this document.

If anyone had bothered to ask the thousands of small businesses in Wales for their views on business support, I am sure they would have said that it is not business support per se that is wrong, but the bureaucratic and time-consuming processes that they have to endure.

Of course, it was not the business community in Wales that put this system into place after the demise of the Welsh Development Agency in 2005.

That blame must be laid squarely at the door of senior civil servants within the Department of the Economy and Transport, the same individuals who have now devised this new strategy.

As if embarrassed by their failure, they have decided to scrap the support system for small businesses, whereas the more honest approach would have been to admit their mistakes and order a wholesale reform, so that assistance could be accessed easily and quickly by business.

By abandoning help to thousands of entrepreneurs who could, with the right support, have the ability to grow their businesses and create jobs, the Minister for the Economy and Transport has taken an enormous risk with the Welsh economy.

At a time when the regional development agencies in England are being abolished, he had the opportunity to create a real competitive advantage for the Welsh economy by creating an effective business support structure that, through a repayable grant system, would have been sustainable.

Unfortunately, those thousands of small firms – which he had the audacity to call the backbone of the Welsh economy during the launch of the ERP last Monday– will be the main losers from a strategy that will starve them of support and investment when they need it the most.

Only time will tell whether, as result of this new programme, the Welsh economy will lose as well.