By Orlando Yeats
Small businesses are at the heart of the Gibraltar economy. They are born in family meetings around kitchen tables, they are born when a worker has a desire to be their own boss or when someone sees a product that could be better or a service that could be improved and they think, why not me?
I have a special sympathy with small businesses. My parents and grandparents were entrepreneurs who set up business in Gibraltar. I grew up watching my parents labour with their personal projects.
Taking after them I have been running various enterprises locally for the last 15 years.
Small firms can be a seedbed for new ideas and a testing ground for new ways of working.
They often lead the way in new products and new services.
They put the customer first, they have to, to survive in a fast-changing world.
Running a small business involves great risks. But to run those risks the rewards must be there. That means that the taxes, red tape bureaucracy and challenges that currently exist must be reduced for the benefit of employers and its employees.
When social insurance costs were raised last year, the Government said that the increase had to be a double digit increase to catch up after so many years without an increase.
At that time, government told the business community that the 10% increase was a one off and future increases would be in line with inflation.
Despite this, social insurance was increased by a further 10%, a whopping four times the rate of inflation, a total increase of 20% in little over a year. Very few local businesses have seen their sales grow by 20% or even 10% in the last year. The increase represents a serious cliff-edge for many business owners who are already operating slim profit margins.
Government administration fees and service costs for the private sector have also risen across the board, with the most noticeable of all being the yearly trade license with an increase of up to 150% in some cases, a brutal one-time rise.
In the UK last October the Chancellor’s Brexit Budget included measures in several areas of tax, expenditure and public policy that were specifically targeted at helping the UK’s small business community.
A well-received approach to help neutralize the Brexit effect.
With cruise liner visits predicted to be down by around 25% for the year, the loss of Monarch and Brexit looming, this is not the time to apply pressure on an already stressed marketplace.
Our Government should be sympathetic to the plight of the small business community and extend the same type of goodwill shown in the UK.
Instead they are raising costs and in addition mobilising their agencies en masse to target small businesses.
There is no doubt that businesses should always comply with the law but checks and balances should be enforced in an even-handed manner.
Instead, what we are currently witnessing is a disproportionate assault on the sector.
Hypocritical, considering the 1000+ strong public protest last week against government’s labour conditions and contracts.
It is not just rising business costs making life difficult for local business.
There are an increasing number of unlicensed companies coming across the border from Spain especially in the construction industry, meaning fully paid up legitimate businesses are being undermined and losing trade. This illegal practice needs to stop with a serious crackdown on these unregistered foreign companies.
We also need to protect small business tenants from mercenary landlords, safeguarding them from paying hyper inflated rents. At the moment commercial rental increases are uncontrolled and disproportionate to market value with no real protection for tenants and only rising, regardless of market forces.
In my opinion we need to assign an independent panel of rental assessors to maintain a fair playing field, and the sooner the better as ordinary people with sound business plans are unfairly being put out of business through toxic lease agreements.
The areas that I have mentioned are just the tip of the iceberg. There are big issues that need to be tackled on customer service standards, increasing staffing difficulties and the culture of apathy from people to get involved in small business trades like hospitality or retail, this needs to change and may have to with a potential economic downturn around the corner.
What we need to do is engage the small business community as a whole. Find out what their issues are, listen to them and tackle them accordingly. We need to undertake a root and branch examination of their concerns and develop a multifaceted approach of support and economic assistance. The small business community is not being properly engaged and it is unsurprising with no real experienced businessmen of this type in frontline politics.
Let’s support the small business community. Let’s give hard working people incentives and the freedom to excel in their fields. After all they contribute hugely to our economy and many are frontline in key industries like tourism.
Small business is the life blood of the Gibraltarian economy.
We need to get it right as a thriving business sector is essential for Gibraltar’s success.
Orlando Yeats is a local businessman and head of communications for the GSD.