20th REPORT, SESSION 1998-99: PROMOTING
SMALL AND MEDIUM ENTERPRISES IN THE EU
Letter from Patricia Hewitt MP, Minister
for Small Business and E-Commerce, Department of Trade and Industry
to the Chairman of Sub-Committee B
Thank you for your very helpful report on "Promoting
Small and Medium Enterprises in the EU". I am delighted to
have the opportunity to reply on the issues raised by the Committee.
May I say that I am as committed to promoting
the interests of SMEs as my predecessor, Michael Wills. A particular
challenge for us all at the DTI is the setting up of the Small
Business Service. I am determined that the 45 new SBS franchises
will be able to deliver world class support to all SMEs from high-growth
start-ups to struggling businesses in disadvantaged areasand
they must do this cost-effectively.
Helping SMEs to take advantage of the opportunities
offered by the European Single Market will be one of the priorities
of the SBS.
I think it is true to say that, as far as SMEs
are concerned, the priorities of the UK and of the European Commission
have never been closer. But we are not complacent and will continue
to urge the Commission to play its role in encouraging new entrepreneurs
and removing barriers to growth for existing businesses.
The best process, to which I refer in response
to paragraph 114(I), in the attached paper, will greatly assist
in this task.
In the attached paper, I have attempted to deal
with all the key issues you have raised, explaining what we are
doing to address each matter. Of course, some of the issues raised
are of higher priority than others and the comments made reflect
13 January 2000
PROMOTING SMALL AND MEDIUM ENTERPRISES IN
PART 4: OPINION OF THE COMMITTEE
The Government welcomes and endorses the general
comments that the Committee has made in these opening paragraphs.
91. As stated, over 99 per cent of EU enterprises
are classed as SMEs. There are advantages to defining SMEs in
a relatively straightforward way, as the current EU definition
does. For example it allows us to estimate the number of small,
medium and large enterprises in the EU without imposing any extra
form filling burden on the businesses themselves. These figures
are the essential background to policy making.
92. SMEs are indeed far more diverse than
the current definition implies. But changing the definition is
not the issue, and in fact may be harmful if it means labelling
many of our entrepreneurs as merely "lifestyle" business
owners, given the right support today's lifestyle business might
be tomorrow's rising star. Government support should recognise
that possibility, and in fact try to encourage it. It is far more
important to recognise that such diversity existsnot just
in terms of desire and capacity to grow but in terms of the age
of the business, their location, the background of the entrepreneur,
and so on.
The Government takes full account of this diversity
whenever policies aimed at SMEs are being designed or reviewed.
And we will continue to do so in developing the Small Business
Service and in the way that support is deliveredto all
its customers. For example, one of the stated objectives of the
SBS is to respond and reach out to hard-to-reach customers in,
eg disadvantaged areas, and in ethnic minority communities. The
SBS will build upon the Competitiveness White Paper ("Building
the Knowledge Driven Economy", produced December 1998) which,
for instance, included an announcement that the Government is
to make funds available to support innovative start-ups with real
growth potential each year over the next three years. Regional
strategies will be developed for providing enhanced support for
start-ups, building on existing activity and best practice, to
ensure the support is tailored to local needs.
93. The Commission is proposing development
of a special unit to co-ordinate European legislative activity.
The UK will be following progress closely.
The Government recognises the concerns of the
Committee on "Gold Plating" and is committed to ensuring
that departments do not add any unnecessary measures when transposing
EC legislation into UK domestic law. The Guide to Better European
Regulations, published in July 1999, sets out the requirements
for any instances of "gold plating". Such instances
should be justified against any costs or benefits that will arise
from them and be brought to the attention of the Cabinet Office
Regulatory Impact Unit. The Government agrees with the Committee
on the importance of consultation.
95. Exemption for SMEs
The Better Regulation Task Force is currently
examining the advantages and disadvantages of regulatory exemptions
for small firms and will publish a report in Spring 2000 on exemptions
and other approaches to helping small firms. One disadvantage
is that SMEs might be discouraged from growth that would take
them out of the upper limit for exemption. The task force has
also looked at enforcement of regulations (the Task Force's Review
of Enforcement was published in April 1999) and will look further
at alternatives to regulation in the new year.
96. The Government recognises the difficulties
that some SMEs can face in raising finance and has therefore introduced
the Enterprise Fund to stimulate the debt and venture capital
markets to improve the supply of finance to SMEs.
97. The SME Initiative provided English
SMEs with £33 million of structural funds in the form of
grants, help and advice. This was to help them adapt to the Single
Market and to become more internationally competitive.
The Small Businesses Service will work to influence
EU policies and activities so they provide increased benefits
to SMEs and promote entrepreneurship within the EU.
Business Links/SBS outlets will be provided
with advice and assistance to ensure they adopt a coherent and
best practice approach to maximising the benefits from EU funds
and support programmes for the benefit of SMEs.
98. Mutual recognition is one of the cornerstones
of the Single Market. It is illegal for a Member State to refuse
to allow the sale of any product which is lawfully sold in another
Member State. Applying this principle faithfully would reduce
the need for difficult negotiation of harmonising Directives at
the European level, but in practice it has been applied erratically.
The Government is aware that unwillingness by
some Member States to recognise certain non-harmonised technical
standards, tested in UK certification houses and widely accepted
in other Member States, has caused difficulties to UK exporters.
It has been a UK priority to make it easier for firms to sell
throughout the EU without having to adapt their products to comply
with local rules or have them tested in different member states.
Internal Market Ministers agreed a Resolution
at the Internal Market Council on 28 October 1999, which set out
action to improve mutual recognition by, for instance, further
education and training of national authorities, providing information
to businesses about their rights under the Treaty and further
data gathering and monitoring to identify instances where free
movement is prevented. We consider that these are sensible measures
and they enjoy broad support, despite the reluctance of one or
two Member States to acknowledge that the failure of mutual recognition
in some sectors is a problem.
99. The Commission is in the process of
reviewing procurement directives. They have not yet published
their proposals on SMEs but it is known they are sensitive to
the needs of small firms. In the UK public sector authorities
have to secure value for money for the taxpayer and where this
is best obtained by the use of central contracts, departments
will follow this route. But within the value for money framework,
authorities need to be aware of the need to consider that small
firms can provide a valuable contribution and that specifications
should not be drawn up in a way which serves to unnecessarily
favour larger firms. Size should only be taken into consideration
when assessing a company's capability to fulfil a requirement.
The Department of Trade and Industry's SME Policy
division is working to promote the benefits that SMEs can offer
government. They have issued a booklet "Tendering for Government
Contract" which is available to small firms. This details
the public procurement process and provides contact details in
100. Research Contracts
The UK Science budget which supports universities
and other Higher Education Institutions is not directly open to
SMEs due to the nature of the research. UK Universities are however,
encouraged to interact with SMEs and this is the specific aim
of initiatives such as the Government's recently announced "Reach
Out to Business and the Community" Fund. This is a joint
initiative between DTI and DfEE which will be run by the Higher
Education Funding Council for England (HEFCE) covering projects
such as the promotion of spin out companies, incubator units and
support for work experience placements. Eighty-five institutions
were successful and were awarded a total of £60 million to
promote links with business.
Other Government research contracts are a matter
for the discretion of individual departments and every effort
is made not to cause any disadvantage to SMEs.
101. The UK Government is currently reviewing
all its arrangements for the provision of post-16 learning. Proposals
were outlined in the recent White PaperLearning to Succeed.
Engaging employers in the policy and decision making process will
be critical to the success of the new arrangements. At least 40
per cent of the members on the new Learning and Skills Council,
at national and at local levels, will have a business background.
This will ensure that publicly funded training provision meets
business needs. It will clearly be vital that the Learning and
Skills Council work hand-in-hand with the new Small Business Service.
The principle initiative for ensuring that training
and development in the UK meets business needs is the Investors
in People Standard. This Standard ensures that training is linked
to the achievement of business objectives. It has been well received
by companies all over the UK. However, it has also been recognised
that few small firms have been attracted to the Standard. The
Standard had therefore recently been overhauled to reduce the
administrative burden involved in achieving it and to make it
more attractive to small firms. The new Standard is due to be
launched shortly, and the Government has now set a target for
10,000 small businesses in England to be recognised as Investors
in People by 2002.
The Government is also launching the University
for Industry in Autumn 2000. To be known as "learndirect"
one of its priorities will be to encourage better focused training
and development in SMEs. It will give information and advice about
available learning opportunities, and will make access to good
quality learning much easier, through the Internet. Individuals
and businesses will be able to access learning programmes at home,
in the workplace, or in any one of the learning centres which
will form part of "learndirect" network.
102. A network of 81 Business Links currently
provide SMEs in England with information and advice on a broad
range of business topics (SMEs in Scotland, Wales and Northern
Ireland enjoy similar support from their own Business support
networks). Trained enquiry staff help customers identify their
business needs and satisfy their information needs by researching,
accessing and retrieving data from a variety of sources and by
packaging this in a form appropriate for the customer. More complex
enquiries are referred to Information Specialists who further
develop the one-to-one relationship. It is common for the input
of other organisations to form part of the solution package (eg
HEIs, RTOs, Business & Innovation Centres (BICs), Euro Info
Both the range of information (and advice) available
to businesses, and the processes put in place to ensure that this
is relevant and helpful will be further developed under the new
Small Business Service (SBS). A multi-access Gateway is being
developed to provide all businesses with an open door to information
and advice from the public sector with strong links to sources
of private and voluntary sector advice. At its core will be a
national database and networked knowledge sites. In developing
this, account will be taken of preferred methods of accessing
information and learning. Information will be available by telephone,
e-mail, direct Internet access, or a personal call at a Small
Business Service franchise outlet (still to be branded Business
Links) or via a wide range of public, private or voluntary sector
stakeholders, such as banks, accountants, Trade Associations and
103. The UK Government is committed to ensuring
that 1.5 million SMEs have access to the Internet and to get 1
million SMEs trading on-line by 2002. In addition, the Information
Society Initiative provides a range of advice and support to help
SMEs. This includes promotion and practical demonstration as well
as related business advice and support. This support is provided
through a national network of centres presently based (in England)
within Business Links (and which will be incorporated within the
new Small Business Service).
The Government believes that competition is
the best guard against excessive telecommunications costs. E-commerce
does give rise to different considerations in terms of tariff
structures however, and both the market and Government are already
responding. For example, in the UK competition has already resulted
in many Internet service providers costs being funded out of call
revenue and so to reductions in Internet call charges by these
companies. DTI and OFTEL will continue to closely monitor developments
in this area, and to work with telecommunications operators to
ensure a wide range of appropriate tariff options is developed.
104. A Single Taxation System
The Government agrees with paragraph 245 of the report
on Taxes in the EU: can co-ordination and competition co-exist
105. The European Commission has brought
forward a proposal to modify the present rules for the appointment
of tax representatives (draft Directive COM(98) 660: Explanatory
Memorandum submitted on 13 January 1999) with the aim to simplify
the obligations for businesses which have no place of establishment
in the Member State where they are liable to account for the tax
(non-established taxable persons"NETPs"). The
principles contained in the Directive are broadly in line with
the UK's already flexible approach, and would have little effect
on the treatment or obligations of NETPs operating in the UK.
The proposals offer the prospect of simplification, more consistency
of treatment and, in particular, a lighter administrative burden
for UK business trading on a non-established basis in other Member
106. The proposed directive on combating
late payment in commercial transactions had its second reading
by the European Parliament on 16 December 1999. The UK fully supports
the principle of the directive, which is to deter late payment
by giving all businesses a right to statutory interest on debt
not paid on time regardless of where the debtor is based in the
EU. In this respect it complements the UK's own late payment legislation,
introduced in November 1998 which similarly provides a statutory
right to interest on late paid debt.
The legislation is only one element of the Government's
campaign to change the UK's payment culture. It has also supported
the publication of league tables showing the average payment times
of public companies and their large private subsidiaries. It is
working with small firms organisations and representatives from
the banking, factoring, trade credit insurance and credit management
industries, as well as the accountancy profession, in the Better
Payment Practice Group. The Group has produced a guide to credit
management; introduced a Better Payment Practice Code and launched
a national programme of credit management seminars.
The proposed directive contains its own monitoring
arrangements. After its implementation, the Commission will undertake,
for at least the first three years, an annual review of, inter
alia, the statutory rate of interest to assess the impact
on commercial transactions and the operation of the legislation
107. At the US Ambassador's Enterprise Event
on 2 July 1999, the Secretary of State made a major speech on
possible reform to insolvency law as it effects individuals, particularly
those who may have failed honestly but wish to try again in business.
A wish to ensure that bankruptcy law and practice does not inhibit
enterprise and responsible risk-taking is the basis on which a
major consultation document is being worked-up for publication
before 31 March 2000.
The Insolvency Bill, to be introduced shortly,
will provide for a short stay on creditors' actions where a company
in difficult wishes to reach agreement with its creditors. This
will leave the directors of the company in control of it, subject
to overview by an insolvency practitioner to safeguard the position
The Competitiveness White Paper ("Building
the Knowledge Driven Economy", produced December 1998) announced
a review of company rescue mechanisms to look at what more might
be done to build on this proposal. There has been a widespread
consultation with business, trade associations and professions
which will inform the contents of a report due to be made to ministers
by 31 December 1999, following which there will be further consultation.
108. The increasing use of the Euro will
affect many UK businesses. To make the most of the opportunities
offered by the euro as well as responding to the challenges it
brings, it is important that UK firms have access to advice on
how best to prepare.
The Euro Preparagraphtions Unit (EPU) has been
set up in the Treasury to co-ordinate a programme of measures
to raise awareness of the implications of the euro, to help them
prepare for strategic and practical changes that will come with
the introduction with the euro.
My Department works closely with EPU to help
raise greater awareness of the euro, particularly among SMEs,
through its contact with businesses and intermediaries, eg 12
regional forums have been established specifically to help SMEs
prepare for the euro.
Other measures already taken to help SMEs prepare
dedicated euro telephone line (08456
01 01 99) and website (www.euro.gov.uk);
providing high quality informationmore
than 400,000 copies of EPU's factsheets have been requested by
UK businesses and intermediaries, and a series of business case
studies has been produced;
facilitating business in eurosbusinesses
can pay tax and VAT in euros, and file company reports in euros.
Firms may issue shares in euros and recipients of Regional Selective
Assistance for internationally mobile projects can obtain grants
denominated in euros;
providing practical help for intermediariesEPU
business advisers have spoken at over 200 events across the UK
and have trained over 500 staff;
a CD ROM produced by the DTI on the
euro, including case studies to alert businesses to the implications
of the euro. This is supported by the EuroPlanner floppy disk,
which is designed to help businesses create their own action plan
for preparing for the euro and includes practical tools on euro
pricing and hedging. To date, we have sent out over 100,000 disks;
DTI is also co-ordinating the preparagraphtions
of Business Links in England, to ensure that they are offering
a high level of practical advice to local small and medium-sized
firms so that they are able to deal with eurozone companies that
wish to trade in euros.
109. DTI has an ongoing role in taking up
complaints from UK businesses and citizens that, notwithstanding
the Single Market, they meet trade barriers when exporting to
EU and EEA countries (eg onerous technical regulations, or requirements
for re-testing their products). The Action Single Market team
investigates these complaints and, if they appear to be well-grounded,
pursues them with the Member State concerned or with the Commission.
Each Member State now has an equivalent of Action Single Market
and the Commission is actively encouraging these co-ordination
centres to work together in solving problems. We support such
co-operation providing it proves to be the quickest and most effective
means of resolving issues rather than relying on the Commission
taking formal/legal action.
110. SMEs in common with other industrial
property right holders, are already assisted by the legal certainty
and strong presumption of validity of their rights which arise
from official scrutiny prior to grant. If however, litigation
becomes necessary after grant, than SMEs in England and Wales
will be assisted by improvements to the civil justice system resulting
from the Woolf Report.
Lord Woolf's report "Access to Justice"
(July 1996) sets out numerous recommendations for improving the
civil justice system in England and Wales. The recommendations
are now being implemented in new Civil Procedure Rules for the
High Court including the Patents Court, which deals with the bulk
of patent infringement cases.
A particular concern for Lord Woolf has been
to improve access to justice for individuals and SMEs. His report
recognised that the current system presented considerable obstacles
for this sector in that it was too complex, expensive and slow
in bringing cases to a conclusion. There was often a lack of equality
between powerful, wealthy litigants and under-resourced litigants.
The new rules, which will be simpler and reduced to a minimum,
are designed to address these issues. For instance, limited procedures
and tighter timetables on fast track and judicial case management
on multi-track cases, will make it more difficult for wealthier
parties to gain tactical advantages over their opponents by additional
expenditure. Moreover, litigants who are not legally represented
will be able to get more help from advice centres and from the
The Patent Office welcomed Lord Woolf's report
and has carried out an extensive review of its own procedures
in its capacity as a tribunal in disputes procedures. The recommendations
that emerged from that review are in the process of being implemented
through changes to secondary legislation and to the Office's own
practice and procedures. In line with the principles established
by Lord Woolf, the changes will help simplify and improve the
speed of proceedings before the Comptroller and thereby reduce
costs to users. This will be of particular benefit to individuals
111. The reorganisation of the Commission
has meant that SME policy is now more central to the Commission's
overall enterprise strategy. This is significant in bringing together
all the key issues affecting SMEs. There is no clear case for
a European Small Business Agency, as most support for SMEs is
provided at Member State level. What the UK Government will be
doing is to continue to press the Commission to keep enterprise,
entrepreneurship, SMEs and the range of e-commerce, knowledge
information, regulatory issues, social exclusion issues, etc,
firmly on the agenda at the next European Council meeting in Lisbon
The issue of fragmentation of capital markets
is not considered a cause for concern. Competition between exchanges
forces them to work better, and free flow of information enables
investors to assess companies across exchanges. Competition could
well drive consolidation of exchanges and markets, but this is
best left to market forces. It does not matter which exchange
a business is listed on, so long as they can raise capital cross-border.
This depends on them being able to issue prospectuses or financial
adverts across borders, preferably to include retail investors.
At the last EU High Level Securities Supervisors'
meeting, the UK put forward a paper on "Removing Barriers
to the raising of Risk capital within the EU" proposing various
changes in this area. Some could be implemented by Member States
in their own national laws, whilst others require changes to Directives.
The UK, for example, has removed the requirement for unlisted
securities to translate prospectuses into English. Other Member
States could follow this course of action, and in practice the
prospectus could be presented in one language to all EU Member
States. Similarly, the UK has removed the requirement to provide
information on UK tax treatmentthe tax treatment to be
applied in the originating country could be used for a UK version.
The Commission welcomed the UK paper as they are doing work in
this area themselves.
112 & 113The Government wholeheartedly
endorses the Committee's conclusions that SMEs and entrepreneurs
have a crucial role in generating future growth, prosperity and
employment in the EU.
(a) The nature of the modern business
environment. The Government endorses the viewpoint of the
Committee. Joined up thinking across Government Departments and
across borders is essential in order to effectively support SMEs
(b) The role of e-commerce. There
is little specific regulation as existing laws continue to apply.
There is however a harmonised European framework for e-commerce
starting to emerge. An E-signature Directive and political agreement
on the draft E-Commerce have been agreed recently. Both of these
especially, the latter, will promote confidence and ensure the
functioning of the internal market. The Commission's eEurope paper
will set the benchmarking targets, especially relevant in the
lead-up to the Lisbon special summit next year (with a focus on
the Knowledge Driven Economy). The International Benchmarking
survey is about to start and will look at the uptake and usage
of ICTs and the development of e-commerce in order to help strategy.
The DTI commissioned a report published in April
1999: Moving into the Information Age 1999 measuring the UK's
progress in adopting Information Age technologies relative to
six other developed economies (US, Canada, France, Japan, Germany,
and Italy). The Government has also set ambitious targets for
the future adoption of e-commerce in the UK and will commission
a follow-on to the 1999 report to help in monitoring progress
against those targets. A more recent report by the Cabinet Office
Performance and Innovation Unit: email@example.com which
was endorsed by the Prime Minister set out a vision for e-commerce
in the UK. Amongst other things it traced the range of measures
already taken by Government, and those still ongoing both domestic,
such as the Electronic Communications Bill, and internationalincluding
measures in, WTO, EU and OECDdealing with the whole range
of areas where regulation needs to keep pace with technological
and market development in order to promote confidence and ensure
the functioning of markets.
(c ) An improved classification of SMEs.
See response to paragraphs 91 and 92.
(d) Operation of the European Single
The Single Market Action Plan (SMAP), which
ran from mid-1997 until the end of 1998, was a broadly successful
programme which focused on improving weak areas of the Single
Market. The Commission has proposed a new Single Market Strategy
as a successor to the SMAP which sets out four broad objectives
for the development of the Single Market over the next five years.
We believe that the strategy will enable us to make progress on
the key areas for the UK in the Single Market: opening up services
markets, particularly financial services; effective utilities
liberalisation; reduction of state aids; further efforts on the
implementation and enforcement of EU Directives; reinforcement
of administrative co-operation between Member States; more effective
application of the principle of mutual recognition.
It is also vital that we have monitoring mechanisms
to measure our progress. We therefore support the concept of annual
reviews and the continued development of the Commission's Single
Market Scoreboard as a key means of assessing how the strategy
is being implemented. One measure of the effectiveness of the
Single Market is to what extent EU Directives are being implemented
in Member States. In mid-1997 (according to the Scoreboard) 35
per cent of Single Market Directives had not been implemented
in all Member States. This figure is now down to 12.6 per cent
(in the November 1999 Scoreboard), but implementation (and enforcement)
of EU rules remains an area for improvement. In the context of
preparagraphtion for the Lisbon European Council, we are pressing
for an environment in the EU which will help SMEs flourish, by
removing trade barriers, giving greater access to venture capital
and reducing regulatory burdens. In this preparagraphtion we are
working together closely with SME representatives.
(e) Harmonisation and mutual recognition
The Government agrees that standard setting
is one of the key components of the Single Market. Standards have
contributed to the competitiveness of the industry, including
SMEs, and also promoted trade. The Government strongly supports
the European Council Resolution of 28 October 1999, on the Role
of Standardisation in Europe and will work with the Commission,
other member States and the British Standards Institution to address
the new challenges. The Resolution is directed at encouraging
and assisting further progress for the success of standardisation
in the future by building on existing structures in Europe. European
standards bodies have been invited to constantly update their
policies to meet the requirements of the market. As an aid to
SMEs, the European Standards Organisations have established a
website providing easy access to information about standards in
support of European legislation. (http://www.newapproach.org/)
The Government strongly supports a European
Council Resolution of 28 October 1999 on Mutual Recognition in
the context of the follow-up to the Action Plan for the Single
Market. This is aimed at improving mutual recognition and the
Government will work with other member States and the Commission
to strengthen its application. This will include further education
and training of national authorities, providing information to
business about it's rights under the EC Treaty and further data
gathering and monitoring to identify instances where free movement
is prevented. The Department of Trade and Industry's Action Single
Market Unit helps UK companies and citizens, particularly SMEs,
overcome problems caused by Trade barriers in other EU and EEA
countries. This is a free and confidential service; further details
can be obtained by telephoning: 0171 215 4212.
(f) Access to finance. The Government
recognises that finance markets are particularly dynamic. It believes
that any intervention therefore needs to be carefully monitored
to ensure it remains relevant to market conditions. The Enterprise
Fund is designed to provide just that flexibility in the UK.
Any EU-wide loan guarantee portfolio would need
to take account of the considerable differences between the operation
of the finance markets in different Member States. National measures
may therefore be the most appropriate in this area.
(g) The Regulatory Burden on SMEs
The Government places a high priority on reducing
the burden of regulation on business, particularly small business.
Its policy is to regulate only where necessary, and then in accordance
with the principles of good regulationtransparency, accountability,
targeting, consistency and proportionality. In this way it will
avoid rules and regulations which stifle creativity and entrepreneurship,
whilst maintaining a proper level of protection for people and
The Government is to set up the Small Business
Service (SBS), as explained elsewhere in this response, one of
whose principal tasks will be to help small-and medium-sized businesses
overcome the barriers to their success. Departments will be required
to consult the SBS on all regulatory proposals likely to affect
small firms at the earliest possible stage. The SBS will work
with regulatory departments to help them implement the "think
small first" philosophy, so that they produce regulations
that are easy to understand, easy to comply with and difficult
to avoid. The SBS will work with small firms and other interested
parties to help it focus on the regulations that really matter,
including those emerging from the European Union, and looking
particularly at whether the proposal would have a disproportionate
effect on small business.
The Cabinet Office Regulatory Impact Unit (RIU)
publishes guidance to government departments on regulation. A
Guide to Better European Regulation already exists. Its Better
Regulation Guide will be revised in the first months of 2000,
taking account of the role of the SBS. The RIU and the SBS will
work closely together to explore ways in which the administrative
burden of regulation can be minimised. Apart from promoting stronger
awareness, they will keep under review new concepts and policies
for achieving that objective.
(h) Information for SMEs. Small
Businesses make a vital contribution to the UK economy and we
are working to ensure that Government helps to foster an environment
and provide support which enables them to thrive. That is why
the Government is establishing a Small Business Service. (SBS)
The new national Gateway, described earlier in this memorandum
(the response to paragraph 102 refers) should provide a major
step forward in the information made available to SMEs.
The SBS will also conduct a comprehensive review
of business support, looking at existing services and future trends.
This will inform development of the SBS information and service
portfolio, identify wasteful duplication and cut customer confusion.
Any new information services will address clearly identified market
(i) Institutional Structures. The
reorganisation of the Commission has meant that SME policy is
now more central to the Commission's overall enterprise strategy.
This is significant in bringing together all the key issues affecting
SMEs. The Commission's Action Plan in response to the Business
Environment Simplification Taskforce (BEST) is another example
of how the Commission is looking widely in its efforts to take
forward the SME and Enterprise agendas.
There is no clear case for a European Small
Business Agency, as most support for SMEs is provided at Member
State level. The existing legal and political structures don't
readily allow for an advocate for SMEs in the way that there is
in the US, either at EU or UK level. The SBS Chief Executive and
the Chairman of the Small Business Council, set up to advise the
SBS, will most closely fulfil this role at UK level.