The UK Parliament’s Treasury Committee and Business, Energy & Industrial Strategy (BEIS) Committee have jointly launched inquiries into the status of British SMEs.
The Treasury Committee’s inquiry will look at the “lessons to be learned” from RBS’s alleged mistreatment of SME customers in its Global Restructuring Group (GRG) unit. It will also examine what finance sources are available to SMEs today, and what framework of protection SME borrowers can count on.
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The BEIS Committee, meanwhile, will focus on access to good management training for small firms, as well as examining government measures to support businesses with late payments, including the recent establishment of the Small Business Commissioner office.
The committees have called for evidence, to be submitted by March 8 and focusing on four core areas of interest to SMEs: management capabilities, fair treatment, improving productivity and scaling up.
BEIS Committee chair, Rachel Reeves said: “Often our small businesses lag behind their overseas competitors in terms of innovation and productivity, and we want to explore what more the government could be doing to help boost this and enable them to access support such as management training.”
“The collapse of Carillion has also thrown light on the treatment of small companies by large firms and the difficulties caused by late payments. Deliberate supply chain bullying can be devastating for business owners and contributes to thousands of business deaths each year. We want to hear if the government could be doing more to stop this.”
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By GlobalDataTreasury Committee chair, Nicky Morgan said: “The case of GRG has undermined the trust of small firms in banks, and highlighted the imbalanced and potentially exploitative relationship between banks and SMEs. Little has changed since GRG to prevent similar mistreatment happening again, nor to guarantee victims access to fair and reasonable redress.
“The committee will consider the regulation of SME lending, including whether banks should be bound by a broader set of duties when dealing with small businesses, and whether the protections afforded to SMEs, and their avenues for dispute settlement and redress, are appropriate.
“The inquiry will also look more widely at the state of SME finance, and whether capital markets are functioning effectively to provide entrepreneurs and small businesses with the finance they need to grow and thrive.”
