Government must give small firms a place at the top table, says FSB

The UK’s largest business organisation calls for a Small Business Administration to fully represent the needs of small firms

A separate Government body with a seat in the Cabinet to defend the interests of small businesses should be created at the heart of Whitehall, says the Federation of Small Businesses (FSB).

Many Government departments deal with small business policy, without one overall department that thinks small first. In its Budget submission to the Chancellor, the FSB is proposing that an agency modelled on the Small Business Administration (SBA) in the US is established to ensure that the voice of small enterprise isn’t lost among competing Government priorities.

The FSB argues that despite promises, successive UK Governments have failed to fully appreciate the needs of the country’s army of small businesses. Too often, the sector has seen temporary ‘eye-catching’ measures that have had no tangible effect on the ground, creating frustration among the small business community.

A UK Small Business Administration, backed by political will and built for the long term, would break that pattern and would help small firms to drive economic recovery in the UK.

The FSB believes that if modelled on its US counterpart, a UK Small Business Administration could facilitate small business finance, such as credit easing and finance to help export; improve procurement opportunities for small firms to meet the Government’s 25 per cent aspiration; and provide speedy disaster assistance for business hit by circumstances outside of their own control – such as last year’s widespread rioting.

Critically, the SBA would challenge other departments to rethink policies that could hurt small business interests as well as co-ordinate Government agency communication with small firms – a major weakness in current arrangements.

With many Government departments making small business policy, the FSB believes that there must be a new Cabinet rank minister to defend the interests of the UK’s 4.5 million small businesses. In America, its Small Business Administration has been helping small businesses since 1953 and has a seat in the Cabinet.

John Walker, National Chairman, Federation of Small Businesses, said:

“The Chancellor has made clear that there will be no big tax giveaways in this year’s Budget and that it is up to the private sector to drive economic recovery by creating jobs and growth. The FSB argues that in order to do that, the Government must think small first by giving the UK’s 4.5 million small businesses a more prominent seat within Government.

“Through implementing a Small Business Administration, it would allow the Government to quickly implement policies aimed at helping small businesses – such as credit easing – which firms have been waiting for since the Autumn Statement. It would give the Government a channel through which it can advertise procurement opportunities, give expert help and advice on exporting as well improve communications with small firms. All of this would in turn help to achieve growth.”

In its submission the FSB is also urging the Government to:

• Select areas for intervention designed to make a lasting impact on small firms’ confidence: access to finance for small firms through non-bank routes, procurement, reforms to employment tribunals and introducing a true fuel duty stabiliser, rather than introduce a barrage of micro-measures and temporary schemes
• Rework how the Government operates and purchases, regulates and composes long term policies
• Look for bold measures to help small businesses in tax simplification, accepting the recommendations from the Office for Tax Simplification to consult on moving to a system of a turnover tax for the very smallest of firms and to reduce the administrative burden

ENDS

Notes to editors

The FSB is the UK's leading business organisation with around 200,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk

The full Budget submission is available from the website at www.fsb.org.uk.

ISDN facilities are available for broadcast media interviews

Media contacts:

Prue Watson: 020 7592 8121 / 07825 125 695 prue.watson@fsb.org.uk
Sara Lee: 020 7592 8113/ 07595 067068 sara.lee@fsb.org.uk

For regional FSB contacts please go to www.fsb.org.uk/regions