There is not much that would help to build household confidence, and with it improve business in the UK, more than a return of the ‘feel-good factor’ that used to surround the economy of Britain. However, if the report from the CBI released this week is any indication of just how much the economic conditions are falling apart around SMEs in Britain, then it looks as if this positive attitude is going to be harder to find then most people would like or welcome.
Chancellor George Osborne may want to pay close attention to the SME Trends Survey because he has spent quite a bit of time attempting to re-energise the sector and helped move the sector forward. This type of recovery will need the economy to be rebalanced before it will move forward from being over dependent on financial services such as the banking sector.
Instead, the focus is going to need on the production sector and Osborne needs to focus on a new initiative for this autumn that is going to prove that the government is working hard to forward the economy despite the deficit burden and the debt.
The good news is that when you look at the last quarter’s results up to July it is easy to see that the SMEs were able to move up their headcount, but in order for the improvement to stay sustained the government is going to have to jump in. Osborne can help by offering initial funding support for projects related to infrastructure and by boosting the construction sector by lifting the VAT or reducing it on home improvements and repairs.