It is always encouraging when Parliament claims it want to learn from people whose life experience is different to the majority of people in the two Houses. One Parliamentary Committee that scrutinises the Government is the Business, Energy and Industrial Strategy Committee (BEIS). Its role is to ensure that the Government Department headed by Greg Clarke is achieving good outcomes for our economy although according to their website, the page describing the ‘Role of the Committee’  explains about the history of the group but says very little about what the Committee of 11 MPs chaired by Rachel Reeves intends to achieve. One of the committee members is Hove MP, Peter Kyle so perhaps he could persuade the Government to improve this part of their website. Tomorrow the Committee is due to meet as part of its ongoing inquiry into small businesses and productivity.

The concerns that are often expressed in our media about British productivity are partly explained by the fact that small businesses which are the largest part of our economy and dominate places such as Sussex are rarely understood in an effective manner by the mechanisms used to measure such data. In addition to this very few people involved in our Governments over many decades have ever shown any real interest in businesses that are described as small and medium sized enterprises (SMEs). Most of the large scale Conservative Party funders are big businesses and the large scale Labour Party funders are dominated by Trade Unions which means that the natural place of comfort for both parties is located some distance away from the very businesses which generate most of the jobs in our society.

One of the aspects of SMEs is the diversity within the range of the enterprises concerned; the phrase covers three separate terms. The first is the most numerous by a long way and these are referred to as micro enterprises which consist of less than 10 employees and the vast majority of businesses in Sussex are micro enterprises. Then there are the businesses which employ 10-49 people which are known as small businesses and finally medium sized enterprises which employ up to 250 people. 

According to Rachel Reeves “SMEs make up more than 99% of private businesses and account for more than half of turnover and employment in the UK. Small businesses are the lifeblood of our economy and it’s vital that that we get the business support right to boost innovation and the productivity of our SMEs. The written evidence we’ve received highlights a range of issues which hinder small businesses and damage their productivity, but two main themes emerge – the often crippling impact of late payments by major companies and the lack of effective management training.”

I work for a small business and I don’t recognise the lack of management training as being in any way comparable to the impact of late payments from both bigger businesses and some public sector contracts. If these two issues were placed on the same scale I would suggest that the late payment problem would score 8 or 9 out of 10 and the lack of management training around 2 or 3. However there are certainly much more significant problems with training more generally for small and micro enterprises. Medium sized businesses are better placed to either fight for external training provision or even create their own training schemes. However this is much harder for businesses employing fewer than 50 people to achieve, particularly as most small businesses employ far fewer than 50 people.

Sadly for those of us involved in businesses which are impacted by late payments, the BEIS Committee has chosen to park this issue with the statement on the website “We’ve questioned the Small Business Commissioner on what is being done to tackle the poor treatment of small and medium-sized businesses and we shall continue to monitor action in this area during this inquiry” This seems to be a rather lame response, in part because the small business commissioner is Paul Uppal who was a Tory MP from 2010-2015 and after failing to retain his seat in 2015 or winning it back in 2017 was appointed as the SBC. This suggests that he is far more sympathetic to the work of the Government than he is to the needs of small businesses in general.

In terms of the meeting tomorrow, the Committee of 11 MPs will engage with a total of 9 people, of whom one runs a small business and three are representing organisations that are formed to support businesses. The other five are from organisations that provide management training. Perhaps if Peter Kyle is reading this column he might question if this meeting will learn very much from the people who run small businesses!