Will Lord Sugar take the sweet with the sour?
Lord Sugar, star of TV’s The Apprentice and the government’s Enterprise Champion, has come under fire recently for his controversial comments relating to funding for small businesses.
Speaking at a conference for SMEs in Manchester, Lord Sugar reportedly claimed that only 15% of small businesses that had been refused credit during the recession had real grounds for complaint.
He then dismissed other struggling small businesses as “moaners”.
According to reports of the conference, Sugar said: “I can honestly say a lot of problems you hear from people who are moaning are from companies I wouldn’t lend a penny to,” and then reportedly claimed that 85% of small businesses in the UK needed an “insolvency practitioner”, rather than more credit.
He added, “The problem is that some younger people who have lived through the last ten years or so of business, they think the irresponsible manner in which the banks dealt is the norm. Let me tell you,” he continued, “you have lived in the unrealistic Disney World in the way banks dished out money.”
Despite the ensuing media coverage in which Lord Sugar believes his words were twisted and “taken out of context”, the comments fired a backlash from the small business community, headed up by chief executive of the Forum of Private Business, Phil Orford.
“Lord Sugar’s comments were quite insensitive and completely erroneous on several points,” he said. “Perhaps his ┬ú700 million fortune has dulled his memories of running a small firm and lessened his understanding of the very people the Government hired him to represent.”
Following complaints from FSB members, the small business group then called for Lord Sugar to resign from his Government post as Enterprise Champion.
Perhaps stung by the wave of criticism, Lord Sugar has reportedly been contemplating his role and questioning whether it is really “worth it”.
“Too much negative stuff is really unhelpful”, he told Camilla Long from The Times. “I may decide that this is simply not worth it, when you’re giving your time free of charge for no agenda. What am I going to get out of it? I’m not getting paid. I’ve not got my titles for the sake of a badge.”
He has since responded to defend his comments, claiming that his words have been misshapen, which has left him feeling “frustrated”.
“Basically they’ve taken a lot of my words out of context,” says Lord Sugar, who had his speech recorded for this very purpose. “Suggesting that I have said that 85% of all businesses are not worth lending to, that is absolutely totally wrong. Rubbish.”
But despite the well-publicised criticisms, Lord Sugar still believes he is right for the job.
“I am the man on this subject,” he told The Sunday Times. “I don’t think anyone else can give the depth of advice and experience I have had over the years.”
Backing Lord Sugar is columnist Guy Levine of Real Business, who attended the “Lord Sugar Wants To Meet You” event in Manchester where the row began. “Lord Sugar’s views might be a tad old fashioned,” says Levine, “but to me it was back to basics!”
“Lord Sugar was saying that many people have not seen times when they had to work hard to qualify for a loan,” says Levine. “People are so used to getting the funds that they want, that they start to believe it’s an entitlement. People will have to get used to providing the majority of the money while using the bank to top up, not stump up all the cash.
“On entrepreneurship, Lord Sugar believes you must beg, borrow and save to get initial capital. You then earn some and reinvest and grow organically. What’s wrong with that view?”
Some may believe that Lord Sugar’s words were dismissive and irresponsible, which unfortunately for the Government’s Enterprise Champion, has snowballed into a surge of media hype.
For others, Lord Sugar is spot on, believing that the only way to halt the current decline and prevent further economic disaster is to stop lending to unsustainable businesses, and instead, invest in the minority that have the correct grounding to grow and support UK industry.
What are your views on the subject – were his comments harsh and unsupportive, or a necessary shake-up for the SME community? Get in touch below.