The Government published its Enterprise Bill on 17th September, which aims to cement the UK’s position as the best place in Europe to start and grow a business. Measures in the bill include reforming the Business Rates Appeals system so that it is more transparent and easier to understand, shifting and reducing the regulatory burden on businesses and extending the Business Impact Target to include regulators. It will also change the way that the term ‘apprenticeship’ is applied.
But the measure that caught everybody’s eye – mine included – was the commitment to create a Small Business Commissioner.
The imbalance in bargaining powers between the smallest of businesses and large firms can be damaging. I’ve written before about the implications that late payments and killer clauses can have on SMEs, so it’s good to see the Government taking measures to combat these imbalances directly. It seems to have recognised and acted on the fact that small businesses often lack the money, expertise and confidence to challenge practices they believe may be against the spirit, let alone the letter, of the law.
The Small Business Commissioner should act as a friend to smaller businesses, helping them to resolve disputes quickly and easily whilst simultaneously providing advice about preventing future issues involving dispute resolution, late payments and contract principles.
The Commissioner is yet to be appointed but they will work closely with Small Business Minister, Anna Soubry. Ms Soubry has been very vocal about the Commissioner’s role and has emphasised her desire for them to pick up the phone and speak directly to CEOs of large firms. Ms Soubry has also asserted that the Commissioner will have the power to name and shame larger businesses who aren’t playing ball. Although this is a last resort, it demonstrates the seriousness of the Government’s commitment to crack down on unfair treatment of small businesses.
Looking abroad for inspiration
Elsewhere, the US has a government agency dedicated to maintaining the wellbeing of small businesses. The US Small Business Administration offers a wide breadth of advice on starting and managing a business, contracting, combatting fraud and also offers extensive loan programmes. The agency summarises its activities with three Cs – capital, contracts and counselling. Having boldly championed smaller businesses for over fifty years, the dividends of this approach are surely self-evident in the world’s most entrepreneurial country.
A country still in the teething stages of dispute resolution development is Germany, which proposed a draft bill early last year with the intention of implementing the EU 2011 Late Payments Directive into national law. Germany is famous for its powerful ‘Mittelstand’, which is hugely productive and has fuelled the country’s growth. By actively acting against late payments in consumer transactions, they are turbo-boosting their position as one of, if not the best countries for SMEs in the world.
The UK may be slightly late to the party when it comes to championing SMEs but for my part, the movement to bolster their voice is laudable and one which I think will be valuable. With the efforts of the USA and Germany for guidance, the UK Small Business Commissioner will be able to learn from its international counterparts and rely on the support of British businesses that want to see this new position wield the power it needs to get SMEs the fair deal they deserve.
For my part, anything that seeks to challenge the culture of big businesses mistreating their smaller partners is to be welcomed.