The recent report released in the run up to the Mayoral elections by the Fawcett Society looked at equality between women and men in London and found women experience a full-time pay gap of 14.9%; 64% of low paid workers are women; 40% of ethnic minority women live in poverty and BAME women comprise approximately one third of London’s female population and the costs of childcare in the UK are amongst the highest in the world, heavily limiting women’s choices to take up paid work
This is all set against the backdrop of a stagnating economy where self employment is seen as the only viable option to meet the needs of women. And I am sure the picture is pretty bleak across the rest of the country for many women.
The coalition want us to believe that the UK is open to business, but ignore the fact that we are officially in a double recession where their austerity cuts, burdensome regulation and stealth taxes are not providing the economic salvation forecasted. The OECD now predicts the economy to shrink 0.1 per cent over the whole of 2012 and could degenerate into dreaded stagflation – stagnation and high inflation.
At the recent Conservative Party Spring Conference David Cameron claimed he was creating “An economy with entrepreneurs everywhere, where anyone has the chance to start something of their own.”
Previously, starting up a traditional business was seen as a lifestyle choice; but unfortunately, with a shrinking job market start-up businesses are now increasingly being seen as a vital alternative to mainstream employment for women since they are being disproportionately affected by the austerity cuts. Today, self-employment represents 1 in 7 people employed in the UK. The self-employment rate as a percentage of all people aged 16 and over is 8.1 per cent (Q4 2011); There are over 1.2 million self-employed women (Q4 2011) – 40 per cent more than there were in Q4 2000.
But with the eradication of government business support services e.g. Regional Development Agencies (RDAs) and Business Links; the concerns surrounding the women’s enterprise agenda has been met with a deafening silence from the Department of Business Innovation and Skills. Recent initiatives driven by private sector to provide enterprise support have proved lacklustre at best and hardly the strategic direction needed to boost enterprise growth in the UK.
Women Are The Backbone Of The Economy
All over the world there is the cry that “women are the backbone of the economy” and efforts should be made by government so women are able to fully participate in the economic recovery. From emerging countries where self employment is providing women with financial empowerment to western countries which recently saw the Obama administration launch a series of much needed support packages which included
- Support access to federal contracting opportunities that will help women‐owned businesses meet the 5% contracting goal and compete in more than 80 industries where they are underrepresented in federal contracting.
- The Small Business Administration will open four new Women’s Business Centres around the country, to bring the total to 114; to train and counsel women on how to start and grow their small businesses
- Elected a new Chair of the National Women’s Business Council, a bi‐partisan federal advisory council created to serve as an independent source of advice and counsel to the President, Congress, and the U.S. Small Business Administration on economic issues of importance to women business owners
These actions show that the Obama administration are providing pragmatic solutions and support so women entrepreneurs continue to play an important role in helping drive economic recovery and growth. If the UK had the same level of female entrepreneurship as the US, there would be approximately 600 thousand extra women-owned businesses, contributing an estimated additional £42 billion to the economy.
So why do we have a fragmented, scattergun, sound bite approach to supporting women’s enterprise given the prime minister emphasis on entrepreneurship as the ‘only strategy’ by which the UK economy can grow.
Banks Displaying Systematic Discrimination Against Women
The importance of access to credit from banks for entrepreneurs to thrive has never been more vital but women entrepreneurs’ are still facing discrimination in lending from banks according to a recent report published by the IPPR.
Their research suggests women are being asked for more collateral than men for loans, being charged higher interest rates and being refused loans more frequently than men. In the UK women on average pay 1% more in interest on a business loan than men, despite the fact that companies run by women are often more productive than those run by men.
It’s important to remember that the issue of women’s access to finance to start and grow businesses has been the subject of debate for policy makers, business support professionals and academics for many years. But the IPPR Report has prompted the Deputy Prime Minister to order an enquiry into ‘sex discrimination’ by banks
The way forward
MITIE Group CEO Ruby McGregor-Smith was recently announced Chair of Women’s Business Council, whose members will provide advice to ministers on how to boost women’s contribution to future economic growth.
She is quoted as saying ‘The new council will be a focused, one-year working group, with the sole aim of ensuring real action by government, business and others to maximise women’s contribution to economic growth.’
Sadly, women are much less likely than men to be involved in enterprise – their self-employment rate is less than half that of men, and they are only half as likely to be involved in setting up and running a business (ONS self-employment data & GEM UK 2010 report).
Let’s see how the government’s desire and action for women’s enterprise will be taken seriously over the next year.