A business lobby group has accused the government of exaggerating statistics that suggest small firms are ‘progressing steadily’.
The Forum of Private Business (FPB) said the results of a survey carried out by the European School of Management (ESM) differed from the Department for Business Enterprise and Regulatory Reform’s (BERR) annual Small Business Survey.
BERR’s survey, released on Monday, found that almost half of small businesses were producing new products and services, with 65% of respondents with employees claiming they wanted to grow.
By contrast, ESM’s survey, commissioned by shadow chancellor George Osborne, found that small business growth is in decline, and the proportion of businesses achieving an annual turnover of more than £1m in their first five years has fallen by 13%.
The ESM report also found that just 7% of small businesses achieved a £7m turnover in the first five years – around 10% lower than in the rest of Europe.
The FPB’s chief executive, Phil Orford, said that while many entrepreneurs would like to achieve a high rate of growth, there are obstacles preventing them from doing so.
“Entrepreneurs are, by their very nature, ambitious,” he said.
“This alone does not amount to progress or growth. The ESM’s research suggests that the situation is, in fact, becoming much harder for small firms.
“Certainly, our members are telling us that the burden of tax, red tape and unfair competition is preventing them from growing,” he added.
© Crimson Business Ltd. 2008
