Jennifer Thomas, Northamptonshire area manager for the Federation of Small Businesses.
SMALL businesses across the region have called on the UK’s regulatory bodies to assess how they can support the UK economy’s drive for enhanced growth and investment.
The Federation of Small Businesses has written to seven of the UK’s regulators outlining a set of measures to unlock small business growth.
The move follows requests from the Prime Minister, the Chancellor of the Exchequer and the Business Secretary for leading regulators to submit proposals for reforms that will spur investments and back economic upturn.
FSB is advocating a better regulatory policy atmosphere – “one that protects and clarifies, yielding higher confidence and ultimately growth for small firms,” said a spokesman – in areas ranging from financial services to broadband and utilities to digital markets.
In its letter, the FSB said it “wholeheartedly agrees that regulators have a duty to take a long hard look at current activities in their sphere for their impact on economic growth – to be ‘pro-growth’ and ‘pro-investment’ in their undertakings”.
Jennifer Thomas, the FSB’s area manager for Northamptonshire, said: “Our proposals will help regulators make sure that small business growth is front and centre as they assemble their lists of pro-growth measures. Regulating for growth does not always mean deregulation – sometimes it means better protection for small firms as consumers.”
The FSB has launched a survey to gauge small firms’ experience of and views on the current regulatory environment. The survey opens tomorrow (Thursday, January 16) and the link will be available on X/Twitter: @fsb_policy, on LinkedIn: FSB Westminster and on Bluesky: @fsb-uk.
“While our members often tell us that current regulatory environment is burdensome, they also understand that smart regulations and switched-on regulators who are alive to their needs are a necessary part of a fairer, more efficient business ecosystem,” said Jennifer.
The measures set out by FSB are:
Financial Conduct Authority
A proper investigation of the blanket use of Personal Guarantees for limited companies. The FSB argues that personal guarantees turn a loan to a limited company into a personal liability yet the individual borrowers are not covered by consumer protections that exist for other kinds of lending.
This is a barrier to growth as company directors hold back from accessing finance to invest in their business, take risks, and grow.
FCA is empowered to look into this if it deems fit, the FSB said, but if it does not, government should legislate to compel personal guarantees within the FCA’s regulatory remit.
Financial Reporting Council
Include in the FRC’s code of practice how it plans to ensure major companies adopt the government’s new anti-late payments stance by supporting much greater transparency and accountability through payment performance and practice of large firms.
It should also launch a campaign to highlight the importance of this to finance directors and departments of all companies, supporting those doing well and working to bring those late payers to settling invoices within 30 days.
The FRC should recommend firms to to sign the government’s and Small Business Commissioner’s new Fair Payment Code.
Ofgem
Ensure that small firms have a 14-day cooling off period on their energy contracts and require suppliers to provide quarterly bills for SMEs to stop them falling into unplanned debt without noticing.
A regular review of its new and welcome moves to improve the intermediaries market.
Ofwat
A fairer approach to small businesses, which are more akin to consumers than corporates or industry. This could include, for example, regulating to ensure small businesses’ water supply is not cut off and regulations for automatic compensation when an account is in credit.
Ofcom
A proposal to broaden its remit to include regulation of cloud services in the same way as broadband providers, ensuring it remains affordable for small businesses and providers do not charge excess egress fees.
Many small businesses rely on the full six-day postal Universal Service Obligation for affordable, reliable delivery of letters and small products as part of their business models and enables them to compete with larger and more established businesses. Ofcom should commit to protecting the USO and consider measures to help Royal Mail (such as changing bulk mail to take an extra day).
Competition and Markets Authority
Confirm how its approach to its new digital markets competition regime will protect small businesses and their customers on major online platforms.
Innovation and competitiveness between software is not achievable if small firms find it difficult to change software products because of data migration obstacles.it’s too difficult to migrate data. The CMA should include that it will look to buttress data interoperability.
Information Commissioner’s Office
A small business exemption or discount for its regulatory fees, which are due to rise considerably, paid for by larger firms that currently pay disproportionately much less by comparison to the size and activity of their business.
A small business campaign and resources to make compliance easier, including help when firms make a mistake rather than a fines-first approach.
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