Small business strategy

Business and Trade Committee Open Inquiry
Opened: 16 Jun 2025 Parliament page
At the Autumn Budget 2024, the government announced its intention to publish a Small Business Strategy “setting out the government’s vision for support for small businesses”. This will be published in 2025. To ensure the Committee and Parliament can scrutinise this policy effectively, the Business & Trade Committee will conduct … Read more
38 Recommendations
29 Conclusions
1 Report
4 Oral sessions
9 Letters
4 Events
Activity timeline 18 events
Oral evidence sessions 4 sessions
Blair McDougall MP · Department for Business and Trade Isobel Stephen · Department for Business and Trade Martin Swain · Companies House Ms Wendy Martin · National Trading Standards Ros Wall · Department for Business and Trade Sal Melki · National Crime Agency
Allen Simpson · UKHospitality Daniel Thompson · Greystar David Hughes CBE · Association of Colleges Jon McGinty · Gloucester City Council Josh Clarke · Clarke Roofing Lydia Papaphilippopoulos-Snape · Warwick Street Kitchen & Saint Kitchen Morgan Schondelmeier · British Beer and Pub Association Nick Plumb · Power to Change Sarah Maclean CBE · Skills England Stephen Montgomery · Scottish Hospitality Group Tim Balcon · Construction Industry Training Board (CITB)
Alice Jeffries · Confederation of British Industry (CBI) Alison Kerrey · Chartered Institute of Taxation Chris Morris · Union of Shop, Distributive and Allied Workers (USDAW) Chris Norbury · E.ON UK Dhara Vyas · Energy UK James Lowman · Association of Convenience Stores Jonathan Athow · HM Revenue and Customs Superintendent Lisa Maslen · National Business Crime Centre, City of London Police Venus Galarza-Mullins · Citizens Advice
Andrew Goodacre · British Independent Retailers Association Brian Berry · Federation of Master Builders Caroline Larissey · National hair and Beauty Federation Dominic Armstrong · Community Trade Union Gareth Penn · Hair and Barber Council Jonny Haseldine · British Chambers of Commerce Paul Brain · Ashcroft Services Limited Paul Wilson · Federation of Small Business Toby Dicker · Salon Employers Association Victoria Brownlie MBE · British Beauty Council
Title HC No. Published Items Response
15th Report – Small business strategy HC 1057 11 Feb 2026 67 Overdue
Recommendations & Conclusions
67 results
1 Conclusion
15th Report – Small business strat…
Improve small business cash-flows, reduce costs, and enhance return on investment for SMEs.
Business confidence amongst smaller firms is too low. The Government has released a short plan, but it does not address the significant cost pressures faced by SMEs. The Department of Business and Trade must do more to improve small business … Read more
Department for Business and Trade
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2 Conclusion
15th Report – Small business strat…
Direct a greater share of government procurement spending towards small and medium-sized enterprises.
Cashflow is king. One of the most important things the Government can do to transform the economic health of SMEs is to direct a greater share of government procurement towards SMEs. (Conclusion, Paragraph 27)
Department for Business and Trade
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3 Conclusion
15th Report – Small business strat…
Government procurement spending with SMEs remains stagnant and requires significant increase.
Procurement accounts for £1 in every £3 of Government spending. Today, just 20% of this—£45.4 billion—goes to SMEs. If the Government directed 30% to SMEs, there would be a £22.7 billion increased cashflow to SMEs every year. Government spending with … Read more
Department for Business and Trade
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4 Recommendation
15th Report – Small business strat…
Set a 30% direct spend target for government procurement with SMEs by 2028.
The Government should set a 30% target for total direct spend with SMEs, to be achieved by 2028. Each department should set out its contribution towards this target, and the Department for Business and Trade should monitor departmental performance. This … Read more
Department for Business and Trade
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5 Recommendation
15th Report – Small business strat…
Appoint a Procurement Council of Experts to gather SME feedback and advise departments.
The Government should appoint a Procurement Council of Experts. This should gather SME feedback on procurement processes and advise departments on best practice to affect a culture change throughout Government. (Recommendation, Paragraph 30) 70
Department for Business and Trade
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6 Conclusion
15th Report – Small business strat…
Mandate the Fair Payments Code as minimum expectation for all large firms.
The Government is right to recognise the risks to SMEs posed by late payments. Until there is new legislation, the Fair Payments Code should become the minimum expectation, rather than an optional extra, for all firms over 250 employees. (Conclusion, … Read more
Department for Business and Trade
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7 Recommendation
15th Report – Small business strat…
Accelerate late payment legislation to mandate 30-day terms and require Fair Payments Code Gold.
The Government should accelerate its late payments legislation and mandate 30-day payment terms by the end of this Parliament. In the meantime, procurement rules should be updated to require all large suppliers to have a Fair Payments Code Gold award. … Read more
Department for Business and Trade
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8 Conclusion
15th Report – Small business strat…
Integrate Fair Payments Code information into Companies House register for clearer payment intelligence.
Companies House should integrate Fair Payments Code information with the register, to provide small businesses with clearer intelligence about a firm’s payment practices. (Recommendation, Paragraph 40)
Department for Business and Trade
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9 Recommendation
15th Report – Small business strat…
Update the construction playbook to end Project Bank Account loophole for improved SME cashflow.
Late payments pose a particularly acute threat to firms in the construction sector. The Government’s construction playbook sets out that Project Bank Accounts should “be used unless there are compelling reasons not to.” This loophole had permitted government departments to … Read more
Department for Business and Trade
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10 Recommendation
15th Report – Small business strat…
Amend Procurement Act 2023 to mandate Project Bank Accounts for large construction projects.
The Government should bring forward amendments to the Procurement Act 2023 that require the use of Project Bank Accounts for all construction projects that cost £2 million and above. In the meantime, it should reissue its construction playbook to reflect … Read more
Department for Business and Trade
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11 Conclusion
15th Report – Small business strat…
Reduce administrative burden and complexity of the tax system for small businesses.
The tax system is becoming more complex. This is generating significant burdens for SMEs, distracting business owners from running their companies, and jeopardising collection of tax revenues. Initiatives such as Making Tax Digital suggest such costs are not adequately appreciated … Read more
Department for Business and Trade
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12 Recommendation
15th Report – Small business strat…
Publish baseline assessment of SME tax compliance costs and aim to reduce by 25%.
The Government should publish a baseline assessment of SME administrative costs of complying with the tax system. The Government should aim to reduce the costs of complying with the tax system by 25% by the end of the Parliament, in … Read more
Department for Business and Trade
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13 Conclusion
15th Report – Small business strat…
HMRC funding arrangements result in millions of small business calls going unanswered annually.
HM Treasury’s current funding arrangements mean that HMRC can meet its call answering targets and still allow 3 to 4 million calls a year to go unanswered. As the small business tax gap grows, it is essential that HMRC gets … Read more
Department for Business and Trade
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14 Recommendation
15th Report – Small business strat…
Reconsider adequacy of HMRC’s 85% call answering target and fund an uplift for SMEs.
Reiterating the recommendation of the Public Accounts Committee, HMRC should ensure it understands how far its digital services can replace telephone services and what level of telephone service it needs to retain to meet the needs of small businesses. Given … Read more
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15 Conclusion
15th Report – Small business strat…
High UK VAT threshold acts as significant brake on small business expansion.
The UK’s high VAT threshold is acting as a significant brake on small business expansion. For service-based industries, like the hair and beauty sector, its impact is distortionary and disincentivises employment creation. (Conclusion, Paragraph 71)
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16 Recommendation
15th Report – Small business strat…
Present options to Parliament for restructuring the VAT system to boost SME growth.
As part of its call for evidence on Tax Support for Entrepreneurs, the Government should set out to Parliament the impact on small business growth of the current VAT system, and present options for restructuring VAT in a way that … Read more
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17 Conclusion
15th Report – Small business strat…
Property revaluations will undermine business rates multiplier reductions for small businesses.
Property revaluations mean that the permanently lower multipliers announced in the Autumn Budget 2025 will likely do little to bring down business rates bills for small businesses. The Government is right to recognise that certain sectors will need support, but … Read more
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18 Recommendation
15th Report – Small business strat…
Complete business rates review, incorporating ambitious reforms including a turnover-based tax and empty property relief.
The Government should complete its review of the business rates system and incorporate more ambitious options for reform. This review should include an evaluation of replacing today’s system with a turnover-based local tax, reconsider the feasibility of implementing an Online … Read more
Department for Business and Trade
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19 Conclusion
15th Report – Small business strat…
Inadequate R&D tax credit administration limits SME uptake, hindering national productivity growth.
Limited diffusion of productivity enhancing technologies is one of the primary causes of the UK’s sluggish productivity growth. Investment in R&D significantly boosts productivity. However, the administration of the 72 UK’s generous R&D tax credit system is limiting uptake amongst … Read more
Department for Business and Trade
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20 Recommendation
15th Report – Small business strat…
Reintroduce 28-day target for R&D tax claims and widen eligibility to include Arts, Humanities.
The Government should reintroduce the previous 28-day target for processing R&D tax claims. It should also widen the eligibility criteria so as to include Arts, Humanities, and Social Sciences research within its scope. (Recommendation, Paragraph 91)
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21 Recommendation
15th Report – Small business strat…
Bring forward tax incentives to encourage intangible investment and diffusion of productivity-enhancing technologies like AI.
The Government should bring forward proposals for tax incentives to encourage increased intangible investment and the diffusion of productivity enhancing general purpose technologies, such as artificial intelligence. (Recommendation, Paragraph 92)
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22 Recommendation
15th Report – Small business strat…
Roll out the Further Education Innovation Fund nationwide through Innovate UK.
The Government should, through Innovate UK, roll out the Further Education Innovation Fund nationwide. (Recommendation, Paragraph 93) Labour costs and the skills system
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23 Conclusion
15th Report – Small business strat…
Increased labour costs from Autumn Budget 2024 significantly impacted labour-intensive small businesses.
The decision to significantly increase labour costs at the Autumn Budget 2024 has had a significant impact on labour-intensive sectors. Future policy changes must both adequately model how small businesses will be affected by tax changes and seek feedback from … Read more
Department for Business and Trade
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24 Recommendation
15th Report – Small business strat…
Introduce and publish SME impact assessments for all future policy changes affecting small firms.
The Government should introduce SME impact assessments when considering future policy changes. These should model the specific cumulative impact of proposals on smaller firms. SME impact assessments should be published alongside any policy proposals. (Recommendation, Paragraph 101) Read more
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25 Recommendation
15th Report – Small business strat…
Current framework's lack of clarity enables bogus self-employment, disadvantaging legitimate small firms.
Bogus self-employment means today’s high street is not a level playing field for small firms. While practices like renting a chair are legitimate, the current framework’s lack of clarity makes it too easy for firms to use bogus self-employment to … Read more
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26 Recommendation
15th Report – Small business strat…
Conduct an immediate review of employee, worker, and self-employed status definitions.
Reiterating our previous recommendation, the Government should fulfil its commitments to conduct a review of employee, worker and self-employed status immediately. (Recommendation, Paragraph 107) 73
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27 Conclusion
15th Report – Small business strat…
Prioritise investigation of bogus self-employment in hair and beauty sector by the Fair Work Agency.
The Fair Work Agency, when operational, should work closely with partner organisations such as HMRC and prioritise the investigation of bogus self-employment in the hair and beauty sector. (Recommendation, Paragraph 108)
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28 Conclusion
15th Report – Small business strat…
Skills England's limited SME engagement hinders small businesses from filling skills gaps effectively.
The Government’s future skills system is a more complicated combination of local and national initiatives. Small businesses broadly welcomed individual reforms but highlighted that they lack a clear route into the system. Skills England’s focus on data and dashboards, combined … Read more
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29 Conclusion
15th Report – Small business strat…
Create specific SME engagement metrics and regional skills shortage forecasts for Skills England's business plan.
Skills England’s business plan should contain specific metrics for engaging SMEs. Skills England should create a clear analysis and forecast for every region of the skills shortages blighting SMEs, broken down by industry and local area. There should be a … Read more
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30 Recommendation
15th Report – Small business strat…
Ensure Business Growth Service provides clear guidance and acts as front door for SME skills.
The Government should ensure that the Business Growth Service operates as the front door for SMEs seeking skills. The Service should supply clear guidance on finding apprentices and funding sources. (Recommendation, Paragraph 116)
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31 Conclusion
15th Report – Small business strat…
Local skills system and LSIPs must integrate with school careers advice for effective SME support.
Careers advice services can play a central role in filling skills shortages and ensuring that young people enter professions in which they are genuinely interested. In order to be truly effective for small firms, the local skills system, and Local … Read more
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32 Recommendation
15th Report – Small business strat…
Embed primary and secondary schools' career services within Local Skills Improvement Plans.
The Government should embed primary and secondary schools’ career services into Local Skills Improvement Plans. (Recommendation, Paragraph 120)
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33 Recommendation
15th Report – Small business strat…
Set out a clear strategy to expand access to high-quality management programmes for small businesses.
Boosting SME productivity depends on improving management capability. At present, support for management training has been fragmented and inconsistent. The Government should now set out a clear strategy to significantly expand access to high-quality management programmes and drive nationwide uptake … Read more
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34 Recommendation
15th Report – Small business strat…
Expand nationwide management programmes and widen eligibility by removing the five-employee requirement.
The Government should expand nationwide programmes like Be the Business and Help to Grow: Management to transform the quality of SME management. It should work with industry bodies to encourage 74 participation, and widen the eligibility of these schemes by … Read more
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35 Conclusion
15th Report – Small business strat…
High energy prices significantly strain small firms' margins, impacting their ability to compete.
High energy prices are acting as a further strain on the bottom lines of smaller firms, significantly impacting their margins and hurting their ability to compete. The Government has recognised the impact this has on larger energy intensive industries. Specific … Read more
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36 Recommendation
15th Report – Small business strat…
Introduce energy cost relief schemes for SMEs, prioritising currently ineligible industrial firms.
The Government should introduce relief schemes for SME energy costs. Priority should be given to firms that are ineligible for the Government’s current industrial energy relief schemes, such as the British Industry Supercharger or the British Industrial Competitiveness Scheme. (Recommendation, … Read more
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37 Conclusion
15th Report – Small business strat…
Small business energy customers lack consumer protections, making them vulnerable to opaque energy markets.
Small business energy customers engage with the energy market more like individual consumers than companies. Despite this, they have access to none of the same protections, leaving them vulnerable to opaque bills, contracts, and a limited number of energy providers. … Read more
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38 Recommendation
15th Report – Small business strat…
Introduce standardised billing formats for non-domestic customers and review energy market issues for high-risk sectors.
To best support SMEs buying energy, the Government should introduce standardised billing formats for non-domestic customers. Reiterating Ofgem’s previous recommendation, the Government should conduct a review of the range of factors causing issues in the energy market for high- risk … Read more
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39 Conclusion
15th Report – Small business strat…
Set out a clear timeline for regulating energy brokers, providing SMEs with certainty.
We welcome the Government’s commitment to regulating energy brokers. Poor practices in this sector have already caused and will continue to cause significant harm to smaller businesses. It is vital that legislation is not delayed. The Government needs to set … Read more
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40 Recommendation
15th Report – Small business strat…
Immediately set out the timeline for regulating Third-Party Intermediaries in the retail energy market.
The Government should immediately set out its timeline for regulating Third-Party Intermediaries in the retail energy market. (Recommendation, Paragraph 144) 75 The costs of crime
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41 Conclusion
15th Report – Small business strat…
Support business security investments to help high street firms protect themselves from crime.
Businesses now confront both rising crime and the increasing costs of implementing crime prevention measures. Government should do more to help businesses protect themselves on the high street. Security investments should be supported not penalised. (Conclusion, Paragraph 149) Read more
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42 Recommendation
15th Report – Small business strat…
Amend business rates regime so security measures do not count towards property's rateable value.
The Government should amend the business rates regime so that security prevention measures, such as CCTV, do not count towards a property’s rateable value. (Recommendation, Paragraph 150)
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43 Conclusion
15th Report – Small business strat…
Enforcement activities disrupt rather than stop illegal high street trading, requiring new agency tools.
Too often successful enforcement activity disrupts rather than stops illegal trading on the high street. Enforcement agencies require new tools to put an end to these practices and to ensure that legitimate businesses are able to thrive on the high … Read more
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44 Recommendation
15th Report – Small business strat…
Introduce amendments to the Anti-social Behaviour Act to strengthen local authority closure order powers.
The Government should introduce the following amendments to the Anti- social Behaviour, Crime and Policing Act 2014: • Give all local authorities, including county councils, explicit powers to issue closure orders, with an option of permanent closure for the premises … Read more
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45 Conclusion
15th Report – Small business strat…
Illegal high street trading requires a complex multi-agency approach with unclear leadership and reporting.
The disruption of illegal trading on the high street requires a complex multi- agency approach, combining neighbourhood policing, Trading Standards, Immigration Enforcement, and specialist financial investigation. As a result, businesses remain unclear as to who leads on this issue and … Read more
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46 Recommendation
15th Report – Small business strat…
Ensure a named Assistant Chief Constable in every police force to tackle business crime.
The Government should ensure that there is a named Assistant Chief Constable for every police force with explicit responsibility for tackling business crime. This Assistant Chief Constable should work with local authorities through Community Safety Partnerships to ensure there is … Read more
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47 Recommendation
15th Report – Small business strat…
Commit funding for more financial investigators in local Trading Standards and police forces.
The Government must recognise the rising presence of organised crime groups and serious criminality on the UK’s high streets and commit to funding more financial investigators in local Trading Standards services and police forces. (Recommendation, Paragraph 167) Read more
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48 Recommendation
15th Report – Small business strat…
Chargeback scams pose a significant and growing threat to SME viability.
Chargeback scams represent a major and growing threat to SME viability. The Government must improve protections against friendly fraud as a central part of its approach to supporting and protecting small businesses. (Conclusion, Paragraph 171)
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49 Recommendation
15th Report – Small business strat…
Ensure forthcoming Fraud Strategy includes specific measures tackling chargeback scams and friendly fraud.
The Government should ensure that the forthcoming Fraud Strategy contains specific measures on tackling chargeback scams and friendly fraud in order to help SMEs in fighting this phenomenon. (Recommendation, Paragraph 172) High street regeneration
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50 Conclusion
15th Report – Small business strat…
Current measures for tackling high street vacancies and property ownership transparency are ineffective.
Stronger measures are needed to tackle long-term vacancies and improve transparency in high street property ownership. Beneficial ownership registers were supposed to make it easier for local authorities and communities to bring vacant properties back into use. It is clear, … Read more
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51 Recommendation
15th Report – Small business strat…
Bring forward proposals for local authorities to efficiently check commercial property ownership.
The Government should bring forward proposals to ensure that local authorities and community groups have efficient means for checking ownership of commercial properties and locating the contact details for these individuals. (Recommendation, Paragraph 177) Read more
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52 Conclusion
15th Report – Small business strat…
High street public realm improvements require funding, partnerships, and locally-driven expertise.
The quality of the public realm is central to the viability of high street businesses. Improvements require both access to funding and effective partnerships between local authorities, developers and businesses. It is essential, however, that such initiatives are driven by … Read more
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53 Recommendation
15th Report – Small business strat…
Introduce a successor to the High Streets Taskforce to support local authority powers.
The Government should introduce a successor to the High Streets Taskforce, to steer implementation of the new powers for local authorities set out in the English Devolution and Community Empowerment Bill. As a first step, alongside the Government’s guidance, the … Read more
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54 Conclusion
15th Report – Small business strat…
Effectiveness of community right to buy depends on communities' practical means to act.
Community owned businesses have significant potential to support the renewal of high streets and safeguard valued local assets. The introduction of a community right to buy represents an important step 77 towards empowering local groups to take ownership of assets … Read more
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55 Recommendation
15th Report – Small business strat…
Reintroduce Community Ownership Fund or mixed finance for high street property ownership.
The Government should consider reintroducing the Community Ownership Fund, or other mixed finance methods for financing the community ownership of properties on the high street. (Recommendation, Paragraph 190)
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56 Conclusion
15th Report – Small business strat…
Gaps in franchise agreement oversight cause employment abuses and unfair contractual practices.
Gaps in the oversight of franchise agreements allow serious employment abuses to go unaddressed and leave franchisees exposed to unfair contractual practices. The absence of a dedicated regulatory framework, or clear accountability for employment standards within franchise networks is no … Read more
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57 Recommendation
15th Report – Small business strat…
Introduce a statutory code of conduct and stronger enforcement for the franchising landscape.
The Government should review the current franchising landscape and consider the introduction of a statutory code of conduct, alongside stronger independent enforcement mechanisms. (Recommendation, Paragraph 195) Business support services
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58 Recommendation
15th Report – Small business strat…
Business support landscape remains fragmented and inadequate, requiring a long-term service for all.
The business support landscape is fragmented and poorly organised. In recent years, departments have often proposed ‘hubs’ as a low-cost way of supplying integrated services offered by many different parts of the public realm. They are often vague in design … Read more
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59 Recommendation
15th Report – Small business strat…
Develop a comprehensive, long-term business support service based on international best practice.
The Government should build a business support service that is fit for the long term, like the US Small Business Service. It should combine these services with arrangements for transforming access to finance, export finance, public procurement, skills, export support … Read more
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60 Conclusion
15th Report – Small business strat…
Current Standard Industrial Classification codes inadequately represent diverse contemporary business activity.
The Government will not be able to deliver change for businesses unless it is able to accurately track and monitor business activity. Current Standard Industrial Classification (SIC) codes fail to identify and define sub-sectors of economic activity. Under these classifications, … Read more
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61 Recommendation
15th Report – Small business strat…
Ensure adequate representation of hair and beauty businesses within the SIC code framework.
The Government should work with the ONS, as part of its SIC code review, to ensure that the various types of business in the hair and beauty sector are adequately represented by this framework. (Recommendation, Paragraph 211)
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62 Conclusion
15th Report – Small business strat…
Government's inconsistent use of 'SME' term hinders targeted policy clarity.
SMEs represent 99.9% of UK businesses, ranging from firms with 2 employees to those with 150. The Government’s decision to use this term interchangeably with ‘smaller firms’ means that it is never clear which category of enterprises’ a particular policy … Read more
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63 Recommendation
15th Report – Small business strat…
Require Government to clearly link policy programmes to specific SME categories.
The Government should reconsider its use of the term SME. Moving forward it should directly link policy programmes to different categories of these business (micro, small, and medium) in order to make it clear as to which group is being … Read more
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64 Conclusion
15th Report – Small business strat…
Conflicting government regulation creates significant complexity and costs for SMEs.
Throughout this inquiry, SMEs have highlighted how contradictory and counterproductive advice from different departments creates confusion and undermines policy effectiveness. This lack of a joined-up approach bedevils regulation, where conflicting requirements are expensive to manage and hurt growth. The Government … Read more
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65 Recommendation
15th Report – Small business strat…
Establish a government clearing house for businesses to report conflicting regulations.
In line with our previous recommendation, the Government should create a place in Government that acts as a clearing house for regulatory conflicts and give businesses a place to report conflicting regulations. The Minister 79 for Small Business should be … Read more
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66 Conclusion
15th Report – Small business strat…
Government's SME Plan lacks independent monitoring and meaningful business engagement.
The SME Plan is one part of the Government’s interlocking plan for growth, but the plan does not empower an independent body to monitor its effective implementation. Engagement with SMEs themselves is currently limited to regional events, rather than a … Read more
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67 Recommendation
15th Report – Small business strat…
Establish statutory SME panels to advise departments and monitor SME Plan impact.
The Government should, as part of its forthcoming Industrial Strategy Bill, create statutory micro, small and medium sized enterprise panels. These panels would advise departments on small business policy. A first task for these panels should be to develop metrics … Read more
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Correspondence 9 letters
13 Jan 2026 From committee Letter to the Minister for Small Businesses and Economic Transformation relating to the evidence session on 25 November on small business strategy, 11 December 2025
Parliament page
13 Jan 2026 To committee Letter from the Minister for Small Businesses and Economic Transformation relating to the evidence session on 25 November on small business strategy, 5 January 2026
Parliament page
26 Nov 2025 From committee Letter to the Minister for Policing and Crime relating to high street crime, 13 November 2025
Parliament page
26 Nov 2025 To committee Letter from the Minister for Devolution, Faith and Communities relating to support for high streets and town centres, 21 November 2025
Parliament page
26 Nov 2025 To committee Letter from the Minister for Policing and Crime relating to high street crime, 25 November 2025
Parliament page
26 Nov 2025 From committee Letter to the Minister for Devolution, Faith and Communities relating to support for high streets and town centres, 13 November 2025
Parliament page
4 Nov 2025 To committee Letter from the District Councils' Network relating to the Committee's inquiry on Small Business Strategy, 1 October 2025
Parliament page
21 Oct 2025 To committee Letter from National Federation of Roofing Contractors relating to the evidence session on 16 September, 15 October 2025
Parliament page
2 Sep 2025 To committee Letter from the Minister for Services, Small Businesses and Exports relating to the plan for small and medium sized business, 31 July 2025
Parliament page