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Forum questions government commitment to small business

On the week that the Small Business Commissioner role was announced, the lack of SME representation on the government’s business advisory group means government strategy is ‘fundamentally flawed’

  • 99% of businesses are not represented on the new strategic advisory group to businesses
  • SME compliance has risen by 8% in real terms over the last few years despite the deregulation agenda
  • SME turnover is now 48% of UK private sector when it was a majority in 2010

The Forum of Private Business, which represents thousands of micro, small and medium-sized employers up and down the country, has written to the Prime Minister urging him to appoint additional members of the Business Advisory Group that represent the 99% of UK businesses.

The group is a small group of business leaders from sectors of strategic importance to the UK that provides regular, high-level advice to the Prime Minister. The group will meet quarterly to provide high level advice to the Prime Minister and senior ministers on critical business and economic issues facing the UK.

Another strategic business advisory group – the Chancellor’s Star Chamber – made a similar mistake but realised the need for SME representation, co-opting John Wright a former FSB chairman onto the group. 

“Once can be considered an oversight, argues Forum Managing Director Ian Cass, “but twice?  We do not doubt the competence and quality of the individuals involved, but their experience of current legislation, supply chain issues and even the tax system are based on corporate life and not that of businesses with limited resources.”

“A large problem with red tape is that best practice from the corporate or public sector has been foisted on smaller firms where the owner is often present in the workplace and so does not need to compile managerial reports for head office. Over the last two years SME regulation has increased by 8% despite a continuing deregulation agenda.”

Forum members and similar businesses have created 15.2 million jobs and will create 65% of jobs, based on the last recovery. However, during the Coalition the share of turnover provided by SMEs slipped below 50% to 48% and the changes in the Budget have unfairly targeted responsible business owners of limited companies who only pay themselves after their employees and the taxman.

“Since the Groceries Code Adjudicator was announced the Forum has campaigned extensively for a similar commissioner to tackle late payment and welcome the potential extension of the powers that this new position may have.  However the wider issue of cash flow has been made worse by the increases to the national minimum wage at a time when SMEs are having to pay for pension auto-enrolment, disproportionate regulatory costs, uncertainty over access to finance and increased likelihood of traumatic events such as HMRC investigations”.

“Greater engagement with the UK’s 1.2 million micro, small and medium-sized businesses is needed for the Government to create the strategy and infrastructure that provides widespread, sustainable growth for the country and counters the innate bias of the public sector in dealing with businesses that reflect their own values and administrative culture”.

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