No fun at the fair for Cable in Scarborough

Stephen Knox, owner of the Yorkshire Dales Meat Company Stephen Knox, of the Yorkshire Dales Meat Company, fears that the new NLGS loans will not be big enough

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It is safe to say that Vince Cable has had more enjoyable visits to Scarborough.

The business secretary was in the Yorkshire seaside town on Friday to attend the annual conference of the Federation of Small Businesses (FSB).

Starting his speech to delegates, he reminisced about his numerous "bucket and spade" holidays in Scarborough as a child.

Such whimsy did little to win over a hostile audience.

'Price shock'

Coming two days after the Budget, the concern of most FSB members was Chancellor George Osborne's decision not to cancel fuel duty going up by 3p in August.

Vince Cable Vince Cable faced the FSB just days after the Budget - perhaps not the best time

Many were livid about it, and made their thoughts well known during a Q&A session with Mr Cable.

The business secretary replied that while the government was sympathetic to their concerns, it simply could not afford to cancel the rise.

He added that the underlying cause of the problem was something out of the coalition's control - the continuing high global price of oil.

"The difficulty this government has got is that an oil price shock is happening at the moment, caused by the situation in the Middle East, and specifically the situation in Iran," said Mr Cable.

"[At the same time] the overriding priority of the government is to balance the budget."

This did little to placate the audience.

Mark Stockwood, FSB national councillor for Cornwall, said: "I share everyone's anger about fuel prices.

"You only have to look at the roads - there are less vehicles these days.

Start Quote

All the rules and regulations are currently in favour of the employee and against the employer”

End Quote Jenny Rooke Beadlam Grange Farmshop

"So it is both a tax increase that won't raise any more money, at the same time as harming small firms who cannot afford the rise."

'Missed opportunity'

Shadow chancellor Ed Balls, who also attended the FSB conference, certainly got a warmer welcome than Mr Cable.

Mr Balls told delegates that he "did not understand" the chancellor's decision to raise fuel duty at a time of such high oil prices, adding that Mr Osborne was "compounding the problem".

The shadow chancellor added that the Budget as "a big missed opportunity".

He said the chancellor should have listened to the FSB and put in place some of its suggestions, such as a VAT cut on home repairs and improvements, to help small firms in the construction industry.

Mr Balls concluded by reiterating Labour's position that the government was not doing enough to boost economic growth.

"We need a budget deficit plan with a focus on jobs and growth," said the shadow chancellor.

Loan scheme

Mr Cable had earlier used a speech to say the government was continuing to do more to boost bank lending to small firms, highlighting the new £20bn National Loans Guarantee Scheme (NLGS).

Launched on Tuesday, it offers small firms loans charging interest one percentage point lower than standard commercial rates.

Alan Terry, owner of York and Hull-based Connoisseur Wines, Alan Terry says that cost of wine starts at £2.56 because of duties before a sip is taken

This has been made possible by government guarantees allowing the commercial banks' to themselves borrow money more cheaply on the wholesale markets.

Yet some business people at the FSB conference remained sceptical, such as Stephen Knox, owner of the Yorkshire Dales Meat Company.

Mr Knox questioned the size of the loans the banks will choose to make available to individual firms under NLSG, saying he feared they would be "derisory".

However, he did add that the government deserved praise for continuing to lower the standard rate of corporation tax.

Regulatory review

Another key part of Mr Cable's speech was that he announced the launch of a government review into the enforcement of regulations.

He said this would look at both regulatory bodies and local government, and that small firms were being urged to provide examples of their experiences via a new website called Focus on Enforcement.

Mr Cable added that the government understood that how regulations were enforced "can be just as burdensome as the rules themselves".

With your average FSB member being pathologically opposed to unnecessary red tape, such an announcement would usually have been met with a round of hearty applause.

Instead, the delegates appeared to be too cross about fuel duty to show any enthusiasm.

Government 'greed'

Earlier in the day, FSB members had mingled around the numerous stalls in an exhibition area that included a section dedicated to Yorkshire food and drink companies.

Alan Terry, owner of York and Hull-based Connoisseur Wines, said the latest increase in alcohol duty would do nothing to help his company.

"With the latest rise, £1.90 from every bottle of wine is duty," he said. "Add packaging and transport, and a bottle of wine costs £2.56 before customers start paying for the actual liquid.

Jenny Rooke Jenny Rooke says the laws are stacked in favour of the employee

"The government simply has to stop being greedy and reduce alcohol duty."

For Jenny Rooke, who runs the Beadlam Grange Farmshop & Teasroom at her and her husband's farm in North Yorkshire, the government needs to do more to reform employment law.

She said: "All the rules and regulations are currently in favour of the employee and against the employer. This sadly puts firms off from taking on apprentices, which is very sad."

FSB national chairman John Walker used his main address to delegates to say that his organisation would continue to "use our energies to get the coalition government listening to our hard working members more than many members currently think they are".

By the end of the day, Mr Cable was left in no doubt about the opinions of the FSB and its members.

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