This is the next in our series of Guest Blogs.  RussRec is an entrepreneur, with his own small business, the very person that forms the bedrock of this great nation.  But whilst he takes risks and works all the hours he can to help his business survive and grow, the Government is not…NOT…helping entrepreneurs and small businesses like Russrec’s….small businesses who create employment, create investment and will help pull this economy out of recession.  This is a personally written blog and one I think you will find very powerful. 

Thanks RussRec. 

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I run a small business specialising in recruitment. As early as December 2007 we saw that there was a likely credit crunch coming as the world owed trillions of dollars, and that the level of credit was unsustainable. Despite our continued success we downsized our office space, delayed decisions on replacing IT infrastructure and reduced our overheads. We increased our margins, and enjoyed a very successful period of trading from January 2008 through to July, we did begin to question our judgement but held firm as interest rates, inflation and the price of food, oil and energy were continuing to rise.

Around September 15^ththe business world literally stopped. Within a week the job briefs we were working on went ‘on-hold’ and no new ones came in. In one respect we were relieved as we were proved right but the lack of job briefs was increasingly worrying. We were busy though with hundreds of middle managers being made redundant – so we helped them the best we could. We setup new services, looked at new ventures with third parties and spoke to hundreds of our contacts, seeking briefs to fill. Whilst there were roles, there were not enough to sustain the business  so we had to make some decisions. Recognising that we were going to run out of money by the last quarter 2009, we set about radically slashing our overheads. We took pay cuts, and reduced our other overheads significantly. Our efforts in generating new business was beginning to pay off, however, people were very wary about hiring  so we spoke to our bank (Barclays) with whom we had been with for almost 20 years about a business loan – just in case. We were ‘allocated’ an Account Manager – Darren, who we met and seemed confident that we would be applicable, if not from the bank but via the Government’s much lauded Working Capital Scheme. We provided young Darren, with information, then more information, and even more information. His positive demeanour turned increasingly cautious.  Some 6 weeks after we had approached our bank, Barclays Bank he said our application had been declined, as our sector is ‘too high a risk’.  Part of the money was to pay Corporation Tax for the previous financial year, where our prudence resulted in greater profit which meant more tax. We have now applied to defer the tax payment and are waiting for a decision. In the meantime we have had to reduce our overheads further, moving out of our office, taking an even bigger pay cut and not making pension payments.

As I write this I worry for the future. The current government have failed people like me – at a time when I should be really planning for my long term financial security, I find myself in a situation where all my savings, assets, and income which I have built up steadily have decreased significantly in the past 18 months. The blame lies with this government’s, indeed the current Prime Minister’s inability to manage the financial services industry. The world followed the UK, bought into Brown’s eulogies about prudence and was duped by Gordon Brown’s fiscal policy that allowed greedy bankers to make millions, creating a credit bubble that burst.

The schemes to help small businesses the Government have created are nothing but hot air as far as I am concerned, even deferring of tax is a rigmarole. I have to pay  some income tax ‘on account’ for this year’s earnings! I can ill-afford it and my salary has been reduced by 30%, yet my accountant is not confident I will be able to defer it – if the Inland Revenue demands his Corporation Tax, we will put the business into voluntary liquidation and they can be our other creditor (Barclays!). Even though we are hopefully over the worse – as I wtite this in my makeshift office in my kitchen at home it makes me VERY angry that I am here as a direct result of bad Government.