A note from Simon…

I had the opportunity to attend a talk by Vince Cable several weeks ago which was his first official speech since joining the government . He spoke at the Cass Business School at City University and laid out his approach to his role leading the department for Business, Innovation and Skills (BIS) and highlighted some policy areas. There were about 200 people in attendance mostly leaders of industry associations or public bodies, or those in policy roles at banks or large companies such as Glaxo Smithkline and a few CEOs such as that of Lockheed Martin UK.

He began by confirming his belief in the benefits of free trade and open economies although capitalism cannot run ‘unfettered’ as we saw with the recent banking crisis. His key themes were commitments to:

• Cut back department costs starting with a third of BIS quangos to be eliminated. Total BIS budget is £20bn of our money.
• Reduce regulation/red tape. He said that although Tony Blair had promised to do this and not delivered, the new government truly believed in doing so
• Focus on development of business/industry capabilities rather than supporting specific companies or sectors as under his predecessor Peter Mandelson
• Support midlands and northern regions for development
• Increase the number of apprenticeships and review the investment in training and further education to see how it can be more effective
• Split retail and investment banking
• Ensure that publicly funded banks meet commitment to provide credit to SME’s and in particular not set the lending bar too high or be overly risk averse

Finally, he referenced George Osbourne’s commitment to simplify and lower taxes for business saying that achieving this was in fact quite difficult as much of the complexity benefits individual sectors while a simpler overall scheme would benefit business in general. So what does all this mean if you’re trying to grow your business and get ahead in ecommerce?

In the short term, I don’t see a big impact, with the possible exception of business expansion in one of the regional development areas especially the North West or North East is likely to continue to carry tax benefits so if you’re looking for greater distribution facilities for example this could help. In the longer term, as with any business, there will be a great benefit if there’s a higher quality of skilled talent to draw on in recruitment.

So why is such a department not so relevant? I think it’s because ecommerce businesses and operations by their nature have to be agile and efficient, and although government red tape could be reduced, it doesn’t massively hinder online businesses as opposed to manufacturing or environmental services for example. However, please leave a comment if you feel otherwise or if there are ways in which you’d like to see Sage Pay lobby the government on your behalf.