Press Release

Small still matters, says ACCA

7 February 2008

Changes in the direction of Government policy may endanger the future of the small business sector, says ACCA’s (the Association of Chartered Certified Accountants) head of small business affairs, Professor Robin Jarvis.

In a letter which will be sent to Ministers at the Department for Business Enterprise and Regulatory Reform (DBERR) today, the global accountancy body underlines the importance of small businesses to the UK economy. The letter also warns Government to not heed those lobbying for policies that focus more on larger established businesses. This may lead Government onto a path that neglects the real creators of employment, wealth and economic growth in the UK – small businesses.

Entrepreneur and former member of the Government’s Small Business Council, Scott Johnson of WF Watt (Contracts) Ltd, supports ACCA’s initiative and said: “A healthy start-up and small business sector ensures the UK’s continued dynamism, flexibility and wealth – and the Government appears to be in danger of forgetting this. These businesses, employing fewer than 50 people, have been at the vanguard of the UK economy over the past five years; ballooning in number and employment.

“Small businesses contribute over £97.2 billion per year to the UK economy and employ 47% of the private sector workforce – some 11 million people. If the Government moves away from nurturing start-up and small businesses, as is suggested by some organisations, it is in real danger of killing the goose that lays the golden eggs.”

The Government is currently consulting on a possible enterprise bill to be introduced to Parliament and a 10 year strategy for enterprise. It seems likely that this strategy will seek to promote internationalisation and business growth. Whilst there is nothing inherently wrong with this focus, ACCA is clear that there needs to be a definite small business perspective in this bill.

Professor Robin Jarvis said: “ACCA is concerned that these new priorities may be unsuitable for, or neglect the small business sector. Small business policy was strongly represented in the past, however the change of the Small Business Service to the Enterprise Directorate appears to have diluted the “think small first” attitude that it promoted. While it is important to promote growth, it is also important that the Government supports the new innovations and new services that new businesses create.”

Professor Jarvis concluded by saying: “While many medium-sized businesses may well have the potential to grow, it is worth remembering that in the last five years for every job created by a medium-sized firm the small business sector created nearly 37.”

Why small matters - Policy briefing