Lesley Riddoch: Small wonder big business is so hated

Big business is in danger of giving all business a bad name. The UK is arguably poised on the brink of a double-dip recession and has embarked on painful public sector austerity.

• Lord Sugar's TV show The Apprentice displays the more venal side of business Picture: Getty

But this year, after taking time out to applaud David Cameron's claim that "we're all in this together," FTSE directors raised their own earnings by 55 per cent, taking home an average 4.9million apiece - that's 88 times the average pay of their own staff, according to a report by Income Data Services.

This flagrant greed - hot on the heels of banking bonuses - has hardened public opinion against all those involved in the (apparently) self-serving gravy train of business. Not useful for national morale at a time when jobs, services and responsibilities are set to be transferred from the nice public to the nasty private sector.

As the owner of a micro-business myself (fewer than 10 employees) I am heartily sick of having to defend bosses like Fred the Shred just because we both operate in the private sector. When bankers and FTSE bosses take cynical bonuses - indirect raids on the collective coffers of the British people - I want to shout, "Not in my name!"

There's a world of difference between the big boys (since they usually are) and the 200,000 firms in Scotland (98 per cent of all companies) which employ fewer than 10 people apiece.

Don't take my word for it - according to a leader in the Financial Times last week: "There are lofty assertions from (FTSE 100) bosses that their pay is merited. Not so. There is little long-term linkage between share price performance and director remuneration. Instead, the main determinant of executive pay is employer size."

In short, the exorbitant, we're not in all this together, trust-smashing, inflation-busting, massive top people's pay awards are being made in the world of big business - not in the world of the small guys. And yet we are being tarred with the same brush, being forced to fit the same "big is beautiful" ground rules and left to sink or swim when large firms suddenly take long-standing contracts in-house or go bust owing money right, left and centre.

I'm not saying small business owners are angels. But the vast majority have nothing in common with cut-throat entrepreneurs like Lord Sugar, whose TV programme The Apprentice makes business appear nasty, mindlessly competitive and exploitative. Charities operate as businesses. Community co-operatives are businesses. Social enterprises are businesses.Many business owners have no wish to scale up and lose the advantages of being small - a life of creative, practical, hands on problem-solving, local connection and some freedom to choose location, lifestyle and colleagues.

Friendship, coincidence, proving an idea can work and sheer bloody-mindedness are the biggest factors motivating the small-scale entrepreneurs I know. Those motivated solely by making lots of money have generally become lawyers or civil servants.

"We've got to back the big businesses of tomorrow, not just the big businesses of today." David Cameron's recent speech pre-supposes that small business acorns will one day become mighty oak trees and finally worth bothering about.

If the Big Society contains anything other than empty rhetoric, small business has to matter now. In many ways it's unfortunate that small businesses organise in Victorian sounding Chambers of Commerce - because these community-facing groups could be engines of recovery for run-down town centres across Scotland. Doubtless though, councils will think it's simpler to extract community benefit cash from an incoming Tesco instead of harnessing the ideas and commitment of small, local firms.

Almost every aspect of government pre-supposes that big is not only beautiful, but uniquely viable, efficient and secure. It simply ain't so.

Federation of Small Business (FSB) research shows that in the last decade, the total number of jobs in the small and micro business base (1-50 employees) has increased by 67,400, while employment by large employers (250 staff or more) has decreased by 33,900. In short, for every job big business has scrapped, small business has created two. Can small business keep doing that?

Vince Cable's pension and maternity pay proposals are a lot less threatening than the relentless skewing of enterprise support, media coverage and procurement opportunities towards big business. It's as if the local, small business sector is populated by under-achieving, hesitant, untalented dwarfs, whose only chance of survival lies in trickle-down from big, brash performers - like the 35 who signed the "We love George Osborne" letter which appeared in newspapers before the recent Spending Review.

Of course companies like Tesco, Asda, Microsoft, BT Carphone Warehouse and B&Q love George Osborne. The Chancellor loves them back. Massive companies could digest a large outsourced public sector contract for hospital management, street cleaning, meals on wheels or Human Resources before lunchtime by making a few phone calls. Nice. Quick. Powerful. Impressive. But not necessarily empowering, community-based, capacity-building, long-term or fair.

Mega-sized contracts remove any vestige of a level playing field between big and small business. "Bundled contracts" span too many different skills and trades for excellent, specialist Scottish firms to stand a chance of winning.Small companies aren't structured like large firms - or large councils - with corporate lawyers and whole departments devoted to contract compliance.

So public procurement contracts can be won only by a few large Scottish firms and multi-department London-based companies and consultancies. Is that what we want? A Surrey-based firm recently won the PR contract for the forthcoming Year of Scottish Island Culture in the face of healthy, local Highland competition. Does that matter?

"Best value" has been achieved and those who complain only appear churlish and further narrow the odds of winning future public sector work. Things could be different. Aberdeen Council doesn't favour small local food suppliers but it has included freshness and low transport miles as tender criteria. Suddenly, local food firms are in business again.

If each part of the Scottish public sector operated a Fife Diet for Enterprise - sourcing goods and services within a thirty mile radius - local confidence, job creation and efficiency-creating connections between small businesses would grow. But they won't. It's all too much like hard work.

CBI boss Richard Lambert has warned that overpaid bosses risk being regarded as "aliens" by ordinary people. The danger is that small business owners grow weary of being regarded as "aliens" too.