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UK IS IN DANGER OF BEING “TALKED INTO RECESSION”, ACCORDING TO NEW SURVEY

New poll from Clifton Asset Management reveals that small companies view the Brown government as “business un-friendly”

Three-quarters believe their own FD would do a better job as Chancellor than Alistair Darling!

 A third of UK companies believe the media is in danger of “talking the economy into recession,” according to a new survey.

The poll, carried out among owner-managed businesses across the country, also found that almost three-quarters of SMEs would not entrust Alistair Darling with overseeing their own company finances by appointing him as their FD.

And in the wake of his first Budget, some 65 per cent said the Chancellor showed no signs of being “business friendly”, with not a single one believing that Gordon Brown‘s government acknowledges the value to “UK plc” of the small business sector – despite recent concessions on measures such as capital gains tax.

The survey was commissioned by Clifton Asset Management, the country‘s leading alternative to banks for owner-managed business finance and strategic planning.

The research also found that more than half of owner-managed businesses – 56 per cent – feel totally neglected by their bank since the onset of the credit crunch.    

Ellis Organ, financial director at Clifton Asset Management, commented: “While there can be no denying the gravity of the situation facing the UK economy, many businesses – 33 per cent - clearly feel that media commentators seem determined to talk us into a full-blown recession, with only 15 per cent of respondents to our survey agreeing with the view that a recession is imminent.

“Only 11 per cent told us that they are seeing the symptoms of a major downturn, with approaching half of those who took part in our survey highlighting strong order books and no noticeable increase in problems over issues such as late payment.”

Mr Organ said the fact that 74 per cent of firms believe their own finance director would perform better as Chancellor than Mr Darling, emphasised how low the government‘s reputation for economic competence had sunk.

“Only one in five owner-managers in our survey said they would consider employing Alistair Darling as their FD – but not without references and a thorough interview process, leaving just 6 per cent who have real confidence in his ability,” said Ellis Organ.

Meanwhile, the survey found that the bank‘s reaction to the credit crunch is causing extra problems for some businesses, with 14 per cent finding that their existing facility had been reduced, or that additional demands such as higher interest rates and collateral security had been imposed. Nevertheless, 28 per cent said their bank had been happy to extend their credit facility with no change in interest charges or security arrangements.

The credit crunch is prompting banks to increase contact with some businesses, although the Cilfton Asset Management survey found that for the majority, their bank manager was an anonymous figure.

Ellis Organ said: “While 15 per cent of our survey sample said they had seen a noticeable upturn in the amount of contact they received from their bank, eager to check on their exposure and solidity, some 56 per cent felt that they may as well not even exist as their bank is concerned.

“It goes without saying that it is more important than ever for SMEs to look at all the alternatives available in the marketplace – and not just banks – in order to consolidate and improve their funding and cashflow position.”

The research also reveals that in the view of most owner-managers, Gordon Brown‘s government does not appreciate their contribution.

Only 4 per cent of firms say decisions such as the recent U-turn on capital gains tax is proof that their worth is recognised in Whitehall, while 9 per cent say there is some element of appreciation, notwithstanding a reduction in tax benefits for owner-managed businesses.

Ellis Organ concludes: “This leaves 85 per cent in our survey effectively feeling snubbed by this government.

“For most of these, there is no question that the ever-burgeoning mountain of red tape is their biggest headache, and that Gordon Brown‘s promise to “light a red tape bonfire” remains an empty one.

“The people who responded to our survey, and countless others like them across the country, form the backbone of our economy. Our survey highlights once again that these individuals continue to feel ignored by a government which only appears to pay attention to the concerns of big business.” 

ENDS             8th May 2008

For further information please contact Neil Fraser, Sturgess Van Damme on 01275 349011 or email neil@sturgessvandamme.co.uk