Small businesses – SMEs – may be small, but that does not mean they should be overlooked. These businesses may employ less than 250 people, yet SMEs account for half of UK business turnover and 6 out of 10 jobs in the private sector. Moreover, the number of small business jobs has grown by one million over the past decade, while big business jobs have shrunk by a million. The trend over the past decade is that small businesses are the job creators. The message is simple – small business matters to our economy just as much as big business. SMEs should have a voice at the heart of the policy making process every bit as strong as all the big business lobbyists put together.
Government policy needs to be as focussed as possible on helping SMEs to grow. That means looking closely at regulations – are they really necessary or could the effect be to protect larger businesses from healthy competition? What more could the Department for Business could do? It means we should look at small business finance. Unlike big business, SMEs are pretty dependent on banks and must pay far higher interest rates than paid by larger businesses as the Bank of England itself has pointed out. Project Merlin has been a great start, yet is there more that can be done to help SMEs grow and to be on more of a level playing field compared with larger businesses? When it comes to exporting and export credit guarantees, do SMEs have the same level of assistance as larger businesses? There are many more areas to be looked at to help SMEs and I hope that comments below may set out more areas for consideration than is possible in this short piece.
The SME voice may be a hotline, it may be a czar. Call it what you will, it needs to be authoritative and unconflicted by big business interests when speaking for the concerns of half our economy and most of our jobs. Particularly given that big Government will always prefer talking to big business. Such a voice is a necessary bulwark against the risk of corporatism and cosy agreements whose effect, history teaches us, is to the disadvantage of SMEs and detriment of economic growth. It would also help maintain necessary counter balance to ensure that SMEs do not get overlooked if rumours of hotlines being given the larger businesses become a reality.