We need all MPs to begin to understand what SME represents


Last Monday in Parliament, Sally-Ann Hart, the MP for Hastings and Rye asked the Government a question regarding her constituency. As it happens the question is very relevant in other parts of Sussex and no doubt further afield. Clearly we want our MP to raise local concerns but when these apply elsewhere, it would be much more powerful for MPs to work together. Whilst they are tribe focused, it could be even more effective if political groups could work together. Thankfully the response was not limited to Hastings but sadly it was disappointing for other reasons. It would be fantastic if other MPs could now work alongside Sally-Ann Hart to get an improvement for all areas. As it happens the response from the Government came from Jeremy Quin who is the MP for Horsham, a seat which he took over from Francis Maude and so he is another Sussex MP. In addition to this connection, Francis Maude set out a target on behalf of the Government that relates very clearly to the issue that was raised by Sally-Ann Hart.

There are some aspects of the question and the reason why Jeremy Quin was the Minister who responded that are limited and so it would be useful if Sally-Ann Hart and the other Sussex MPs could spread this out a bit further in terms of the subject as well as the geography. The question began with these words

“Beautiful Hastings and Rye has a number of excellent small to medium-sized manufacturing businesses”

What is crucial about this is Sally-Ann’s grasp that businesses in her area, just like in the rest of Sussex are not simply part of a much broader definition which sadly is how the Government treats businesses most of the time. Indeed, when Jeremy responded he stated

“The good news is that with our SME action plan in place”

It is vital that Jeremy and his Ministerial colleagues must listen to the words from Sally-Ann and hopefully other Sussex MPs who understand that the phrase SME refers to Small, Medium and also Micro Businesses. Each of these categories is very different from the others and the Government must begin to understand these differences.

As it happens it was the SME phrase that Francis Maude focused on in his statements so this is not a new challenge. However, one of the reasons why SME as one group was referred to in the past was that the EU used the same categories in their information. As we are no longer within the EU we can begin to focus on the details with a bit more care, particularly if our Government is going to try to improve our economy. The reality is that procurement directed at micro or small businesses can often achieve much more impact in terms of local growth and new jobs than ones directed at large or medium business. Sadly, in some cases when a large business gets sent a procurement opportunity, they strip out some of the finance for their shareholders and then sub contract the work to smaller companies. There are certainly very good reasons for the Government and indeed Councils to work a bit harder to pass on suitable contracts to small and micro businesses directly even if they need to set out a larger number of contracts in the beginning.

The statements that Francis Maude made when he was a Minister was for SMEs to be handed at least 25% of the Governments procurement. Later on, I recall this being proposed to extend to 33% of the Governments contracts. Sadly, when Jeremy was responding to Sally-Ann’s question he disclosed that the current position is that

“SMEs are now accounting for nearly 20%”

and of course nearly 20% could be several percentages below it and so it is well below 25%. Now to be clear the question and the answer were both focused on military procurement and so there may be different levels in other areas of the Governments procurement. However, we need to persuade the Government to break down its data so that micro, small and medium sized businesses will all be understood and the benefit for each group of companies will also be made clearer. The micro businesses employ less than 10 people and medium businesses employ up to 249 people. To treat these two groups of companies as though they are a single set is clearly not helpful. There are of course a number of networks that help link many of these companies together, even though in a range of contexts they compete with one another. If businesses can liaise with one another and work together in strategic sense, then surely asking a few MPs across all parties to work together on themes such as Government procurement and supporting businesses is not unreasonable?

About ianchisnall

I am passionate about the need for public policies to be made accessible to everyone, especially those who want to improve the wellbeing of their communities. I am particularly interested in issues related to crime and policing as well as health services and strategic planning.
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