MP Raises Concerns Regarding ‘Broad’ Description Of SMEs

A Conservative backbencher has called on the government to do more to not only improve the definition of small and medium-sized businesses, but also provide more specific support to such companies.

Anne Marie Morris, MP for Newton Abbott, has proposed a debate in the House of Commons stating that the current definition of SMEs is too broad and means little to the average household, adding that a new approach is needed to create a term “meaningful and relevant” to the economy.

She added that the government needed to consider a “culture change” which reflects the vital role such businesses play.

“Small businesses drive our economy. They are what create growth. In terms of employment, new employment this year has been driven two-thirds from the SME community, not from the big boys,” she explained.

“But I believe that what we need is a strategy that supports that across all government departments - which recognises the importance of small businesses and supports them.”

Mrs Morris’s comments have come after research by Barclays and the Business Growth Fund suggested there has been a 3.4 per cent increase in the number of start-ups launched in the UK in the first six months of 2013, compared to the end of 2012.

Expert Opinion

While many in the business community are familiar with the term of SME, the points made in the Commons yesterday are very relevant and timely. <br/> <br/>"Through our own work in this area, it has become increasingly apparent to us that this term covers an incredibly broad spectrum of businesses of different size and with different ambitions. For instance, there is a huge difference between the concerns of an entrepreneur starting from scratch with a new venture and a medium-sized business with a large workforce and numerous clients. <br/> <br/>"However, one thing that businesses of all size have in common is the need to have access to timely, specialist legal advice on the key concerns which they need to address, whether it is finalising arrangements for the first lease on a commercial property or introducing new policies for staff. <br/> <br/>"While this debate about the definition of such companies is likely to continue for some time, the need for the right support remains a constant." Steven Beahan - Partner