Government-commissioned report hails ‘Golden Age’ for small firms
- Credit: Eastern Daily Press � 2008
A Government-commissioned report published today claims that the UK is witnessing a “Golden Age” for small firms.
But a spokeswoman for the Federation of Small Businesses (FSB) in East Anglia warned that more work needs to be done by the next government, whatever the result of the forthcoming General Election, if the sector is to realise its full potential.
The report, by former Trade & Industry Secretary Lord Young, who was appointed as an adviser to Prime Minister David Cameron on enterprise in 2001, says the number of small firms in the UK has increased by 760,000 since 2010 to 5.2million.
The report also highlights moves by the Government to created “a more supportive environment” for small firms, including the Employment Allowance concession on National Insurance Contributions and the doubling of Small Business Rate Relief, as well as a general £2.2billion reduction in the cost to business of regulation.
In addition, it says the new British Business Bank is “making business finance markets work more effectively” while the Funding for Lending scheme is encouraging banks to lend to small firms directly.
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In the Executive Summary of the report, Lord Young says: “When the Prime Minister asked me to report on small firms in 2011 the only other report was the 1971 Bolton Report.
“Bolton’s conclusion seems scarcely credible today: that the small firms sector was in a state of terminal decline in both number and in contribution to output and employment and in a few years would cease to exist. Economies of scale would make the remaining 800,000 small firms uncompetitive and doomed to extinction.
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“Today, I am pleased to report almost the exact opposite. There are now 5.2m small firms in the UK and they account for 48% of employment and 33% of private sector turnover. Indeed over 19 out of 20 firms in the land today employ fewer than 10 people.
“This shift in the number and importance of small businesses has not been simply a linear trend over 40 years; within this
Parliament alone I have seen a transformation. The business population has increased by 17% since 2010. In 2011 we saw a record number of start-ups, and the beginning of 2014 saw a record increase in the number of firms.”
Jeanette Thurtle, the FSB’s development manager in East Anglia said: “FSB seized the opportunity to work with Lord Young on the small business agenda, and this report underlines many of the issues we have made real progress on – not least his work to bring together education and business, streamlining public procurement for small firms, and the establishment of the British Business Bank.
“However, there are still many areas that need further work, as discussed in our Business Manifesto for the 2015 General Election, such as poor payment practices and a fundamental reform of business rates.
“Small firms have appreciated a strong voice of enterprise in the heart of Government. Whoever wins the next General Election, FSB members believe a dedicated business voice at 10 Downing Street should continue. This is the first step to the founding of a proper UK Small Business Administration, with all the benefits it would bring as it has in the USA,” she added.