understanding implications
on AIM, the SME is an unwieldy con- Mark Prisk accepted the need for greater
cept. The businesses falling into this ex- clarity in this area: “It means that execu-
cessively broad definition have little in tives should not be wasting their time
common other than that they are not con- coping with a diversity of regulations
sidered by BERR to be ‘corporates’. which may or may not affect them.
Viewing all in the same light is nei- “This a very complex subject as what
ther practical nor effective. Indeed, the constitutes a very small business in
broad range of organisations within the terms of staff – an IT consultancy, for
category is already recognised. example – is actually turning over more
Small limited companies, for example, than £1 million a year. However small
normally qualify for more simplified re- businesses are identified, we need to
porting to Companies House. Such con- promote greater certainty about their
cessions apart, it is difficult to provide a
consistent quality of service to all SMEs
“A government needs to show
rights and responsibilities.”
so long as they are grouped under a sin-
that it understands the different
gle banner.
characters of those businesses
Finance for the SME
and the potential impact of its
Finance is a recurring theme in any dis-
Different ways of viewing policies. It is significant that
cussion of the smaller business. How ef-
Mr Prisk accepts the thrust of that criti-
governments do not themselves
fective does the Opposition believe that
cism but sees the SME community tiered create wealth but establish the
the schemes introduced since Autumn
2008 will be in stimulating that sector?
on criteria other than size. “There is in-
creasingly a difference between life-
framework in which that
More specifically, perhaps, what pro-
style businesses which the owners have
process occurs. Through a lack
grammes could SME executives expect
no intention of expanding into much
of understanding, there is the
to see in place with a change of govern-
ment? Prisk argues that the Chancellor’s
larger operations, and the serial entre-
preneur whose raison d’être is to make
danger that the framework will
initiatives have been too little; too late.
companies grow, sell them on, and start
not be fit for purpose.”
The opportunity was missed, he be-
lieves, when events like the collapse of
again. Lehman Brothers in September empha-
“A government needs to show that it develop naturally and migrate between sised the state of the financial markets
understands the different characters of the different modes of operation.” and that assistance would be required
those businesses and the potential im- Accepting that view for the moment, for key sectors of the economy.
pact of its policies. there must surely be a case for stream- “It was two months before there was
“It is significant that governments do lining the definitions of size which are any mention of a loan guarantee
not themselves create wealth but estab- used as break points in different areas of scheme. It was not in place by Christ-
lish the framework in which that process legislation. mas and is opaque in the way it is likely
occurs. Through a lack of understanding, It has already been established that to operate. The scheme is now being
there is the danger that the framework will the criterion for depth of reporting dis- rolled out but it is clear that the banks
not be fit for purpose. closure is annual turnover: for establish- have not been fully briefed at the level
“Defining SMEs into rigid bands on ing the point at which ‘social’ provisions where businesses have to interface with
grounds of size or any other criterion kick in it is the number of employees. them.
would not be productive as we would That is true also for the disabled em- “Other schemes have been flagged but
end up with narrow ‘silos’ that would ployment quota, but the break-point is have not been cleared by the EU, whose
make it more difficult for businesses to significantly higher. approval is required. The car industry
Chancellor’s initiatives were too little, too late. The opportunity was missed, it is claimed, when events
like the collapse of Lehman Brothers in September emphasised the state of the financial markets
76
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The Informed Executive
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