Damian Collins: Acorn Areas - supporting new growth for community small business

Damian Collins is the prospective parliamentary candidate for Folkestone and Hythe.

If you believe that small businesses are at the heart of strong communities, as well as a strong enterprise economy, you may share my concerns that not enough is done to support and encourage them.

Community businesses, like a neighbourhood general store, or village shop, play an important role in the wellbeing of the area they serve.

These businesses are good for the economy, and the quality of life of local people. Yet the taxes and regulations heaped onto them make existing businesses struggle and put people off starting up on their own.

Under Gordon Brown, 15 new business regulations have been introduced for every single working day. The costs of regulation disproportionately affect small business, where it is five times higher per employee than for large businesses.

At the Conservative Party Conference in Bournemouth I proposed an idea to try and lift this burden from small community businesses, by creating new local enterprise zones, called ‘Acorn Areas’, areas of lowers taxes and lighter regulation.

This idea was presented in one of the ‘Meet the Candidates’ sessions and received the support of the Conference to be presented formally to the party’s policy review committee, chaired by Oliver Letwin.

These ‘Acorn Areas’ could be a village or neighbourhood with few or no community businesses.

Within these areas businesses may pay little no business rates, which can currently cover one third of their overheads. 

We could also look at tax incentives for these businesses, and also for individuals who invest in them.

I also believe we should consider alternatives to make the system of regulation much lighter than it currently is. For example, we would examine whether businesses trading within the same ‘Acorn Area’, could be regulated as a collective group, rather than as individual businesses.

And there could be additional incentives for businesses that mostly sell locally produced goods, recognising the reduced environmental impact of local sourcing. This could favour local artists and craftsmen; as well shops selling locally produced food, and farm shops.

Finally, there needs to be consideration of the length of life of an ‘acorn area’, once it has been created. Businesses need to know they can plan for the future, based on certain facts about the environment in which they work. I would favour basing the life of an acorn area, not on an arbitrary number of years, but on the performances of the businesses. So the benefits that a business might receive from being within an ‘acorn area’ would remain until its turnover or profitability had grown above a certain level.

In the centre of Folkestone, a ‘creative quarter’ is becoming established where the landlord has created space for creative businesses, like artists and galleries, to establish themselves at favourable rates. This idea acknowledges that often these businesses can struggle to find the resources they need to get going, but when they do they can help improve and revitalise the retail environment of the whole area.

In Sulgrave in Northamptonshire, the local community came together to re-open their village shop. A shop that has not only survived, but thrived, and last year won the Countryside Alliance’s best rural retailer award for the South of England.

There are people with the drive and determination to make community businesses work. I would like to see a tax and regulation regime that made it easier for them, rather one that stifles the creativity, energy and determination is takes to make them succeed.

I would welcome your views on this idea, as part of the preparation of the formal submission to the Conservative Party’s policy review.