Posted: Friday, 3rd February 2012
A REPORT by the Centre for Enterprise was used to argue in Parliament last week that Britain's smallest businesses should be treated differently from other small and medium-sized firms.
MPs argued that despite being the UK’s job creators many micro enterprises are hindered by regulations aimed at much bigger businesses.
MP for Newton Abbott Anne Marie Morris cited the MMU report to back her case for reconsidering regulations for micro enterprises (companies with less than 10 employees) to a Select Committee of around 100 MPs.
The Conservative MP argued that small businesses could be an important engine for growth in a recession and therefore deserve to be given more support: “ In America, the evidence is that 90% of all new jobs created after their last downturn was exactly in this sector.”
New definition of micro
The report, which was prepared by Professor Lynn Martin and Professor Robert Jerrard with support from 20 other institutions, discusses redefining a micro business as one that has less than 5 employees rather than less than 10, as has been done in Australia and France.
Professor Martin, who is director of the Centre for Enterprise said: “It’s important to have a debate about tax and regulation of small businesses because over 85% of companies in the UK have less than 10 employees.
“It’s a huge issue. The argument is that without differentiating between types of firms, support is ineffective and the potential for tailored policy is lost.
“It was great to see the report being mentioned by an MP in order to make a strong case for differentiation of support to empower small businesses.”
The report was first presented at the All Party Parliamentary Group on small businesses to MP for Business and Enterprise Mark Prisk prior to the Autumn budget statement in November.
He commented: “We very much welcome this debate. It has been a useful opportunity to address the questions of what we mean by micros and how we can best help them. As a government we are determined to provide the support that micros need and I am confident that in the years ahead the UK will remain of the best places in which to start, invest and grow a business.”
Dean of the Business School Professor Ruth Ashford said: “The work that Professor Lynn Martin and colleagues undertake has been outstanding. The fact that it is being debated in the House underlines its importance and shows that the Centre for Enterprise is working at the heart of enterprise in this country. Their work also has a strong impact internationally."