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Small Business Support

Volume 450: debated on Thursday 26 October 2006

There are now 4.3 million businesses in the United Kingdom—the highest number ever recorded. There are 600,000 more businesses, and employment in small and medium sized enterprises has risen by over a million since 1997.

Our small business sector continues to become more dynamic, and our business environment is now one of the best in the world for starting and growing a business. The World Bank’s “Doing Business 2007” report ranks the UK sixth in the world, and ahead of all other EU member states, in terms of the ease of doing business.

The Government are determined that the environment for businesses and entrepreneurs builds on this competitive edge. It is therefore vital that Government—national, regional, local—understands, and responds to, businesses’ needs, and takes stock of the way we support them.

The Small Business Service

Six years ago the Government established the Small Business Service (SBS) as a dedicated team within Government on small business issues.

The SBS is estimated to be saving business at least £85 million annually. It has tackled a wide range of issues: reinvigorating the Enterprise Insight campaign and firmly establishing our national Enterprise Week; bringing together on line for business more than 50 Departments and agencies under the internationally acclaimed portal; starting a pioneering website:—to make it much easier for small businesses to supply to the public sector; successfully launching the first phase of Enterprise Capital Funds to help the development of high-growth small businesses; and modernising the Small Firms Loan Guarantee.

It has championed the introduction of just two annual commencement dates for new legislation affecting business; and local Business Link operators have doubled their customer base, and achieved high levels of customer satisfaction which have been maintained following the transition from national to regional management.

It is essential that the SBS delivers results that matter to business and keep the UK internationally competitive for business. I have decided that the SBS should become a smaller, sharply focused policy unit that will have close links with business and with other parts of Government, including in particular HM Treasury. It will also lead time-limited projects like its current business support simplification programme. Its focus will be on the issues where Government action can influence the business environment; and on support for our entrepreneurs—the people who make the difference in firms large and small.

The SBS will advise Ministers on enterprise policy across Government, and on ways in which policies can be small business-friendly. It will retain specialist expertise in key areas, including: business support policy; small business finance; specific enterprise policy issues including increasing entrepreneurship among women and ethnic minorities; and research, statistics, analysis and performance evaluation.

On behalf of Ministers, it will have policy responsibility for the Government’s investments in a range of business support—including Business Link, Enterprise Insight, and access to finance funds. It will maintain its strong international links on enterprise, especially with other EU member states and with the United States.

The SBS will not deliver services—support programmes should wherever possible be run close to customers, regionally or locally—and it no longer needs the status of being a “next steps” executive agency. From April 2007, it will operate as a policy unit within the DTI’s Enterprise and Business Group.

Business support

The current arrangements for publicly funded support schemes for businesses in England also need to be streamlined. At present they are confusing for business, and often not the best use of public funds. Much has already been done within my Department and our Small Business Service to simplify support arrangements. The number of separate schemes has been reduced from well over a hundred to just six.

The SBS will continue to lead the major programme to simplify the many schemes and programmes that are funded elsewhere in Government, and regionally and locally. The Government’s aim, announced in Budget 2006, is that the number should be reduced from over 3,000 to under 100 by 2010.

Advice from business

I pay tribute to the unstinting advice and support that Ministers and the Small Business Service receive from the large number of business owners and others who give their time and advice generously. The Small Business Council, the Ethnic Minority Business Forum and the Small Business Investment Task Force all help to shape the Government’s thinking on business issues. It is important that the small business voice into Government is strong and coherent, and there is scope for the current arrangements to be simpler. I have therefore asked the Small Business Service to work with these groups, and with the main business representative organisations, to consider how the voice of business people can most effectively reach into Government in the future.

I expect to make further announcements on these matters in due course.