Helping SMEs rise to the challenge
Rebecca Long Bailey MP
“SMEs constitute 99.9% of businesses, employ 60% of people in the private sector and have a combined turnover of £1.8tn, 47% of all private-sector turnover”
Commentary by Rebecca Long Bailey MP, Shadow Secretary of State for Business, Energy and Industrial Strategy
Small and medium-sized enterprises (SMEs) are the backbone of the British economy – they constitute 99.9% of businesses, employ 60% of people in the private sector and have a combined turnover of £1.8tn, which is 47% of all private-sector turnover. SMEs play a pivotal role in the British economy and their strength is integral to Britain’s prosperity.
London Stock Exchange Group’s 1000 Companies to Inspire Britain report is a celebration of the most exciting and dynamic SMEs in the UK. It highlights the importance of supporting these enterprises in order to encourage an inclusive and productive economy. These firms form the lifeblood of UK high streets and town centres, and the stories catalogued in this report provide a wealth of examples of SMEs embracing the changing UK economic landscape.
There are, however, a number of challenges ahead for SMEs. First, though only one in five businesses export, they do so overwhelmingly to the European Union (EU). Getting a Brexit deal that protects these businesses is therefore vital.
Second, tax regulation for SMEs can often be complicated. In some cases it can be unfair. Business rates are one such example that often unfairly disadvantage SMEs in expensive town centres, compared to large online firms with no physical presence or an out-of-town location.
Third, there are regional disparities. Business densities across all firm types remain higher in the south than in the north – so there remains scope for expansion of SMEs in the north.
Despite these challenges, at the beginning of 2017 the confidence measure currently stands at +8.5, up from -2.9 in the previous quarter. In the face of numerous challenges, SMEs remain resilient. This is why it is so often these enterprises that embrace change and drive forward our economy.
The 1000 Companies to Inspire Britain report is thus an important contribution to the literature on SMEs. It raises awareness of Britain’s success in this area, as well as highlighting what needs to be done to make business flourish.