Introduced to parliament on 25 June 2014, the Small Business, Enterprise and Employment Bill has been lauded by the powers that be as a way to ‘remove barriers’ for growth and ‘strengthen the foundations’ for the continued and sustainable economic recovery.
Prime minister David Cameron, business secretary Vince Cable and any other politician with an opinion on British business have proclaimed that it is companies at the smaller end of the spectrum which provide the key to creating a world-leading economy.
There has been much focus on removing the red tape of business administration and unlocking short and long-term finance, but the new bill provides the first real opportunity to see how this government will create a lasting legacy for small and medium-sized businesses (SMEs).
So, what can we expect from the Small Business, Enterprise and Employment Bill? Well, first off we’ve got some familiar rhetoric. Already rolled out by her Majesty the Queen during her speech to open parliament in early June, it will aim to make the UK the ‘most attractive place to start, finance and grow a business’. Great: but how is it going to do this?
The headline initiatives included in the bill centre on improving access to finance through building out the availability, and crucially sources, of investment for SMEs. The government wants to open up access to small business credit data and make it easier to get a loan from a ‘lender’ of some sorts rather than just a bank.
‘Cheque imaging’ has been proclaimed to be a way for speeding up cheque clearing from six to two days – an improvement on what is a frustrating wait, but ultimately soon to be dormant payment process.
By increasing trade credit availability by up to £1.8 billion, the bill will allow HMRC to share non-financial VAT registration data on a ‘controlled basis’ to qualifying organisations.
The government will also now be required to publish a target on ridding the nation of regulatory burdens (back to red tape) in each parliamentary term. This is hoped to hold future administrations to account.
In light of the increasing, and exciting, wave of foreign entrepreneurs deciding to set up shop in the UK, the bill is seeking to further improve Britain’s reputation as a place to do business. This will be done, it is revealed, by increasing transparency on who owns and controls companies and sanction those who hide interest in UK companies for illegal gains.
Already revealed by GrowthBusiness, there is also an attempt to cut down on the exploitation of zero hours contracts by removing the exclusivity clause that tied a worker to a single employer.
We have also been promised:
- A calculation, on a worker-by-worker basis, for penalty payments associated with the National Minimum Wage
- Strengthening of rules for director disqualifications
- Assistance for small business global expansion by improving support from UK Export Finance
- A streamlining of insolvency law to rid it of un-needed costs
- An improvement of companies’ lament practices to ensure fair terms for invoices can be negotiated
So, what have the men behind the policy got to say about it? Cable declares that the bill has been designed to help ‘hard-working people’ have confidence in employers and provide tougher penalties for those exploiting the system.
Matthew Hancock, skills and enterprise minister, believes that the bill helps everyone from small village cafes to big city tech start-ups.
‘Small businesses are the driving force of our economy and this bill is part of the government’s commitment to back enterprise and help firms to start-up and scale-up,’ he urges.
The government has set out its stall and backed up its prior promises to help small businesses in the UK. Contained in the Small Business, Enterprise and Employment Bill are a lot of promising pledges which, if got right, will make a big and lasting impact.
However, with election year already well under way we can only hope that pandering for votes doesn’t distract the government. Watch this space.