Select Committee on European Union Thirteenth Report


Letter from Patricia Hewitt MP, Minister for Small Business and E-Commerce, Department of Trade and Industry to the Chairman of Sub-Committee B

  Thank you for your very helpful report on "Promoting Small and Medium Enterprises in the EU". I am delighted to have the opportunity to reply on the issues raised by the Committee.

  May I say that I am as committed to promoting the interests of SMEs as my predecessor, Michael Wills. A particular challenge for us all at the DTI is the setting up of the Small Business Service. I am determined that the 45 new SBS franchises will be able to deliver world class support to all SMEs from high-growth start-ups to struggling businesses in disadvantaged areas—and they must do this cost-effectively.

  Helping SMEs to take advantage of the opportunities offered by the European Single Market will be one of the priorities of the SBS.

  I think it is true to say that, as far as SMEs are concerned, the priorities of the UK and of the European Commission have never been closer. But we are not complacent and will continue to urge the Commission to play its role in encouraging new entrepreneurs and removing barriers to growth for existing businesses.

  The best process, to which I refer in response to paragraph 114(I), in the attached paper, will greatly assist in this task.

  In the attached paper, I have attempted to deal with all the key issues you have raised, explaining what we are doing to address each matter. Of course, some of the issues raised are of higher priority than others and the comments made reflect that.

13 January 2000




  The Government welcomes and endorses the general comments that the Committee has made in these opening paragraphs.


  91.  As stated, over 99 per cent of EU enterprises are classed as SMEs. There are advantages to defining SMEs in a relatively straightforward way, as the current EU definition does. For example it allows us to estimate the number of small, medium and large enterprises in the EU without imposing any extra form filling burden on the businesses themselves. These figures are the essential background to policy making.

  92.  SMEs are indeed far more diverse than the current definition implies. But changing the definition is not the issue, and in fact may be harmful if it means labelling many of our entrepreneurs as merely "lifestyle" business owners, given the right support today's lifestyle business might be tomorrow's rising star. Government support should recognise that possibility, and in fact try to encourage it. It is far more important to recognise that such diversity exists—not just in terms of desire and capacity to grow but in terms of the age of the business, their location, the background of the entrepreneur, and so on.

  The Government takes full account of this diversity whenever policies aimed at SMEs are being designed or reviewed. And we will continue to do so in developing the Small Business Service and in the way that support is delivered—to all its customers. For example, one of the stated objectives of the SBS is to respond and reach out to hard-to-reach customers in, eg disadvantaged areas, and in ethnic minority communities. The SBS will build upon the Competitiveness White Paper ("Building the Knowledge Driven Economy", produced December 1998) which, for instance, included an announcement that the Government is to make funds available to support innovative start-ups with real growth potential each year over the next three years. Regional strategies will be developed for providing enhanced support for start-ups, building on existing activity and best practice, to ensure the support is tailored to local needs.


  93.  The Commission is proposing development of a special unit to co-ordinate European legislative activity. The UK will be following progress closely.

  94.  "Gold-Plating"

  The Government recognises the concerns of the Committee on "Gold Plating" and is committed to ensuring that departments do not add any unnecessary measures when transposing EC legislation into UK domestic law. The Guide to Better European Regulations, published in July 1999, sets out the requirements for any instances of "gold plating". Such instances should be justified against any costs or benefits that will arise from them and be brought to the attention of the Cabinet Office Regulatory Impact Unit. The Government agrees with the Committee on the importance of consultation.

  95.  Exemption for SMEs

  The Better Regulation Task Force is currently examining the advantages and disadvantages of regulatory exemptions for small firms and will publish a report in Spring 2000 on exemptions and other approaches to helping small firms. One disadvantage is that SMEs might be discouraged from growth that would take them out of the upper limit for exemption. The task force has also looked at enforcement of regulations (the Task Force's Review of Enforcement was published in April 1999) and will look further at alternatives to regulation in the new year.


  96.  The Government recognises the difficulties that some SMEs can face in raising finance and has therefore introduced the Enterprise Fund to stimulate the debt and venture capital markets to improve the supply of finance to SMEs.


  97.  The SME Initiative provided English SMEs with £33 million of structural funds in the form of grants, help and advice. This was to help them adapt to the Single Market and to become more internationally competitive.

  The Small Businesses Service will work to influence EU policies and activities so they provide increased benefits to SMEs and promote entrepreneurship within the EU.

  Business Links/SBS outlets will be provided with advice and assistance to ensure they adopt a coherent and best practice approach to maximising the benefits from EU funds and support programmes for the benefit of SMEs.


  98.  Mutual recognition is one of the cornerstones of the Single Market. It is illegal for a Member State to refuse to allow the sale of any product which is lawfully sold in another Member State. Applying this principle faithfully would reduce the need for difficult negotiation of harmonising Directives at the European level, but in practice it has been applied erratically.

  The Government is aware that unwillingness by some Member States to recognise certain non-harmonised technical standards, tested in UK certification houses and widely accepted in other Member States, has caused difficulties to UK exporters. It has been a UK priority to make it easier for firms to sell throughout the EU without having to adapt their products to comply with local rules or have them tested in different member states.

  Internal Market Ministers agreed a Resolution at the Internal Market Council on 28 October 1999, which set out action to improve mutual recognition by, for instance, further education and training of national authorities, providing information to businesses about their rights under the Treaty and further data gathering and monitoring to identify instances where free movement is prevented. We consider that these are sensible measures and they enjoy broad support, despite the reluctance of one or two Member States to acknowledge that the failure of mutual recognition in some sectors is a problem.


  99.  The Commission is in the process of reviewing procurement directives. They have not yet published their proposals on SMEs but it is known they are sensitive to the needs of small firms. In the UK public sector authorities have to secure value for money for the taxpayer and where this is best obtained by the use of central contracts, departments will follow this route. But within the value for money framework, authorities need to be aware of the need to consider that small firms can provide a valuable contribution and that specifications should not be drawn up in a way which serves to unnecessarily favour larger firms. Size should only be taken into consideration when assessing a company's capability to fulfil a requirement.

  The Department of Trade and Industry's SME Policy division is working to promote the benefits that SMEs can offer government. They have issued a booklet "Tendering for Government Contract" which is available to small firms. This details the public procurement process and provides contact details in government departments.

100.   Research Contracts

  The UK Science budget which supports universities and other Higher Education Institutions is not directly open to SMEs due to the nature of the research. UK Universities are however, encouraged to interact with SMEs and this is the specific aim of initiatives such as the Government's recently announced "Reach Out to Business and the Community" Fund. This is a joint initiative between DTI and DfEE which will be run by the Higher Education Funding Council for England (HEFCE) covering projects such as the promotion of spin out companies, incubator units and support for work experience placements. Eighty-five institutions were successful and were awarded a total of £60 million to promote links with business.

  Other Government research contracts are a matter for the discretion of individual departments and every effort is made not to cause any disadvantage to SMEs.


  101.  The UK Government is currently reviewing all its arrangements for the provision of post-16 learning. Proposals were outlined in the recent White Paper—Learning to Succeed. Engaging employers in the policy and decision making process will be critical to the success of the new arrangements. At least 40 per cent of the members on the new Learning and Skills Council, at national and at local levels, will have a business background. This will ensure that publicly funded training provision meets business needs. It will clearly be vital that the Learning and Skills Council work hand-in-hand with the new Small Business Service.

  The principle initiative for ensuring that training and development in the UK meets business needs is the Investors in People Standard. This Standard ensures that training is linked to the achievement of business objectives. It has been well received by companies all over the UK. However, it has also been recognised that few small firms have been attracted to the Standard. The Standard had therefore recently been overhauled to reduce the administrative burden involved in achieving it and to make it more attractive to small firms. The new Standard is due to be launched shortly, and the Government has now set a target for 10,000 small businesses in England to be recognised as Investors in People by 2002.

  The Government is also launching the University for Industry in Autumn 2000. To be known as "learndirect" one of its priorities will be to encourage better focused training and development in SMEs. It will give information and advice about available learning opportunities, and will make access to good quality learning much easier, through the Internet. Individuals and businesses will be able to access learning programmes at home, in the workplace, or in any one of the learning centres which will form part of "learndirect" network.


  102.  A network of 81 Business Links currently provide SMEs in England with information and advice on a broad range of business topics (SMEs in Scotland, Wales and Northern Ireland enjoy similar support from their own Business support networks). Trained enquiry staff help customers identify their business needs and satisfy their information needs by researching, accessing and retrieving data from a variety of sources and by packaging this in a form appropriate for the customer. More complex enquiries are referred to Information Specialists who further develop the one-to-one relationship. It is common for the input of other organisations to form part of the solution package (eg HEIs, RTOs, Business & Innovation Centres (BICs), Euro Info Centres etc).

  Both the range of information (and advice) available to businesses, and the processes put in place to ensure that this is relevant and helpful will be further developed under the new Small Business Service (SBS). A multi-access Gateway is being developed to provide all businesses with an open door to information and advice from the public sector with strong links to sources of private and voluntary sector advice. At its core will be a national database and networked knowledge sites. In developing this, account will be taken of preferred methods of accessing information and learning. Information will be available by telephone, e-mail, direct Internet access, or a personal call at a Small Business Service franchise outlet (still to be branded Business Links) or via a wide range of public, private or voluntary sector stakeholders, such as banks, accountants, Trade Associations and HEIs.


  103.  The UK Government is committed to ensuring that 1.5 million SMEs have access to the Internet and to get 1 million SMEs trading on-line by 2002. In addition, the Information Society Initiative provides a range of advice and support to help SMEs. This includes promotion and practical demonstration as well as related business advice and support. This support is provided through a national network of centres presently based (in England) within Business Links (and which will be incorporated within the new Small Business Service).

  The Government believes that competition is the best guard against excessive telecommunications costs. E-commerce does give rise to different considerations in terms of tariff structures however, and both the market and Government are already responding. For example, in the UK competition has already resulted in many Internet service providers costs being funded out of call revenue and so to reductions in Internet call charges by these companies. DTI and OFTEL will continue to closely monitor developments in this area, and to work with telecommunications operators to ensure a wide range of appropriate tariff options is developed.



104.   A Single Taxation System

The Government agrees with paragraph 245 of the report on Taxes in the EU: can co-ordination and competition co-exist as stated.

  105.  The European Commission has brought forward a proposal to modify the present rules for the appointment of tax representatives (draft Directive COM(98) 660: Explanatory Memorandum submitted on 13 January 1999) with the aim to simplify the obligations for businesses which have no place of establishment in the Member State where they are liable to account for the tax (non-established taxable persons—"NETPs"). The principles contained in the Directive are broadly in line with the UK's already flexible approach, and would have little effect on the treatment or obligations of NETPs operating in the UK. The proposals offer the prospect of simplification, more consistency of treatment and, in particular, a lighter administrative burden for UK business trading on a non-established basis in other Member States.


  106.  The proposed directive on combating late payment in commercial transactions had its second reading by the European Parliament on 16 December 1999. The UK fully supports the principle of the directive, which is to deter late payment by giving all businesses a right to statutory interest on debt not paid on time regardless of where the debtor is based in the EU. In this respect it complements the UK's own late payment legislation, introduced in November 1998 which similarly provides a statutory right to interest on late paid debt.

  The legislation is only one element of the Government's campaign to change the UK's payment culture. It has also supported the publication of league tables showing the average payment times of public companies and their large private subsidiaries. It is working with small firms organisations and representatives from the banking, factoring, trade credit insurance and credit management industries, as well as the accountancy profession, in the Better Payment Practice Group. The Group has produced a guide to credit management; introduced a Better Payment Practice Code and launched a national programme of credit management seminars.

  The proposed directive contains its own monitoring arrangements. After its implementation, the Commission will undertake, for at least the first three years, an annual review of, inter alia, the statutory rate of interest to assess the impact on commercial transactions and the operation of the legislation in practice.


  107.  At the US Ambassador's Enterprise Event on 2 July 1999, the Secretary of State made a major speech on possible reform to insolvency law as it effects individuals, particularly those who may have failed honestly but wish to try again in business. A wish to ensure that bankruptcy law and practice does not inhibit enterprise and responsible risk-taking is the basis on which a major consultation document is being worked-up for publication before 31 March 2000.

  The Insolvency Bill, to be introduced shortly, will provide for a short stay on creditors' actions where a company in difficult wishes to reach agreement with its creditors. This will leave the directors of the company in control of it, subject to overview by an insolvency practitioner to safeguard the position of creditors.

  The Competitiveness White Paper ("Building the Knowledge Driven Economy", produced December 1998) announced a review of company rescue mechanisms to look at what more might be done to build on this proposal. There has been a widespread consultation with business, trade associations and professions which will inform the contents of a report due to be made to ministers by 31 December 1999, following which there will be further consultation.


  108.  The increasing use of the Euro will affect many UK businesses. To make the most of the opportunities offered by the euro as well as responding to the challenges it brings, it is important that UK firms have access to advice on how best to prepare.

  The Euro Preparagraphtions Unit (EPU) has been set up in the Treasury to co-ordinate a programme of measures to raise awareness of the implications of the euro, to help them prepare for strategic and practical changes that will come with the introduction with the euro.

  My Department works closely with EPU to help raise greater awareness of the euro, particularly among SMEs, through its contact with businesses and intermediaries, eg 12 regional forums have been established specifically to help SMEs prepare for the euro.

  Other measures already taken to help SMEs prepare include:

    —  dedicated euro telephone line (08456 01 01 99) and website (;

    —  providing high quality information—more than 400,000 copies of EPU's factsheets have been requested by UK businesses and intermediaries, and a series of business case studies has been produced;

    —  facilitating business in euros—businesses can pay tax and VAT in euros, and file company reports in euros. Firms may issue shares in euros and recipients of Regional Selective Assistance for internationally mobile projects can obtain grants denominated in euros;

    —  providing practical help for intermediaries—EPU business advisers have spoken at over 200 events across the UK and have trained over 500 staff;

    —  a CD ROM produced by the DTI on the euro, including case studies to alert businesses to the implications of the euro. This is supported by the EuroPlanner floppy disk, which is designed to help businesses create their own action plan for preparing for the euro and includes practical tools on euro pricing and hedging. To date, we have sent out over 100,000 disks;

    —  DTI is also co-ordinating the preparagraphtions of Business Links in England, to ensure that they are offering a high level of practical advice to local small and medium-sized firms so that they are able to deal with eurozone companies that wish to trade in euros.


  109.  DTI has an ongoing role in taking up complaints from UK businesses and citizens that, notwithstanding the Single Market, they meet trade barriers when exporting to EU and EEA countries (eg onerous technical regulations, or requirements for re-testing their products). The Action Single Market team investigates these complaints and, if they appear to be well-grounded, pursues them with the Member State concerned or with the Commission. Each Member State now has an equivalent of Action Single Market and the Commission is actively encouraging these co-ordination centres to work together in solving problems. We support such co-operation providing it proves to be the quickest and most effective means of resolving issues rather than relying on the Commission taking formal/legal action.


  110.  SMEs in common with other industrial property right holders, are already assisted by the legal certainty and strong presumption of validity of their rights which arise from official scrutiny prior to grant. If however, litigation becomes necessary after grant, than SMEs in England and Wales will be assisted by improvements to the civil justice system resulting from the Woolf Report.

  Lord Woolf's report "Access to Justice" (July 1996) sets out numerous recommendations for improving the civil justice system in England and Wales. The recommendations are now being implemented in new Civil Procedure Rules for the High Court including the Patents Court, which deals with the bulk of patent infringement cases.

  A particular concern for Lord Woolf has been to improve access to justice for individuals and SMEs. His report recognised that the current system presented considerable obstacles for this sector in that it was too complex, expensive and slow in bringing cases to a conclusion. There was often a lack of equality between powerful, wealthy litigants and under-resourced litigants. The new rules, which will be simpler and reduced to a minimum, are designed to address these issues. For instance, limited procedures and tighter timetables on fast track and judicial case management on multi-track cases, will make it more difficult for wealthier parties to gain tactical advantages over their opponents by additional expenditure. Moreover, litigants who are not legally represented will be able to get more help from advice centres and from the courts.

  The Patent Office welcomed Lord Woolf's report and has carried out an extensive review of its own procedures in its capacity as a tribunal in disputes procedures. The recommendations that emerged from that review are in the process of being implemented through changes to secondary legislation and to the Office's own practice and procedures. In line with the principles established by Lord Woolf, the changes will help simplify and improve the speed of proceedings before the Comptroller and thereby reduce costs to users. This will be of particular benefit to individuals and SMEs


  111.  The reorganisation of the Commission has meant that SME policy is now more central to the Commission's overall enterprise strategy. This is significant in bringing together all the key issues affecting SMEs. There is no clear case for a European Small Business Agency, as most support for SMEs is provided at Member State level. What the UK Government will be doing is to continue to press the Commission to keep enterprise, entrepreneurship, SMEs and the range of e-commerce, knowledge information, regulatory issues, social exclusion issues, etc, firmly on the agenda at the next European Council meeting in Lisbon and beyond.

  The issue of fragmentation of capital markets is not considered a cause for concern. Competition between exchanges forces them to work better, and free flow of information enables investors to assess companies across exchanges. Competition could well drive consolidation of exchanges and markets, but this is best left to market forces. It does not matter which exchange a business is listed on, so long as they can raise capital cross-border. This depends on them being able to issue prospectuses or financial adverts across borders, preferably to include retail investors.

  At the last EU High Level Securities Supervisors' meeting, the UK put forward a paper on "Removing Barriers to the raising of Risk capital within the EU" proposing various changes in this area. Some could be implemented by Member States in their own national laws, whilst others require changes to Directives. The UK, for example, has removed the requirement for unlisted securities to translate prospectuses into English. Other Member States could follow this course of action, and in practice the prospectus could be presented in one language to all EU Member States. Similarly, the UK has removed the requirement to provide information on UK tax treatment—the tax treatment to be applied in the originating country could be used for a UK version. The Commission welcomed the UK paper as they are doing work in this area themselves.


  112 & 113—The Government wholeheartedly endorses the Committee's conclusions that SMEs and entrepreneurs have a crucial role in generating future growth, prosperity and employment in the EU.



  (a)   The nature of the modern business environment. The Government endorses the viewpoint of the Committee. Joined up thinking across Government Departments and across borders is essential in order to effectively support SMEs and entrepreneurship.

  (b)   The role of e-commerce. There is little specific regulation as existing laws continue to apply. There is however a harmonised European framework for e-commerce starting to emerge. An E-signature Directive and political agreement on the draft E-Commerce have been agreed recently. Both of these especially, the latter, will promote confidence and ensure the functioning of the internal market. The Commission's eEurope paper will set the benchmarking targets, especially relevant in the lead-up to the Lisbon special summit next year (with a focus on the Knowledge Driven Economy). The International Benchmarking survey is about to start and will look at the uptake and usage of ICTs and the development of e-commerce in order to help strategy.

  The DTI commissioned a report published in April 1999: Moving into the Information Age 1999 measuring the UK's progress in adopting Information Age technologies relative to six other developed economies (US, Canada, France, Japan, Germany, and Italy). The Government has also set ambitious targets for the future adoption of e-commerce in the UK and will commission a follow-on to the 1999 report to help in monitoring progress against those targets. A more recent report by the Cabinet Office Performance and Innovation Unit: which was endorsed by the Prime Minister set out a vision for e-commerce in the UK. Amongst other things it traced the range of measures already taken by Government, and those still ongoing both domestic, such as the Electronic Communications Bill, and international—including measures in, WTO, EU and OECD—dealing with the whole range of areas where regulation needs to keep pace with technological and market development in order to promote confidence and ensure the functioning of markets.

  (c )   An improved classification of SMEs. See response to paragraphs 91 and 92.

  (d)   Operation of the European Single Market

  The Single Market Action Plan (SMAP), which ran from mid-1997 until the end of 1998, was a broadly successful programme which focused on improving weak areas of the Single Market. The Commission has proposed a new Single Market Strategy as a successor to the SMAP which sets out four broad objectives for the development of the Single Market over the next five years. We believe that the strategy will enable us to make progress on the key areas for the UK in the Single Market: opening up services markets, particularly financial services; effective utilities liberalisation; reduction of state aids; further efforts on the implementation and enforcement of EU Directives; reinforcement of administrative co-operation between Member States; more effective application of the principle of mutual recognition.

  It is also vital that we have monitoring mechanisms to measure our progress. We therefore support the concept of annual reviews and the continued development of the Commission's Single Market Scoreboard as a key means of assessing how the strategy is being implemented. One measure of the effectiveness of the Single Market is to what extent EU Directives are being implemented in Member States. In mid-1997 (according to the Scoreboard) 35 per cent of Single Market Directives had not been implemented in all Member States. This figure is now down to 12.6 per cent (in the November 1999 Scoreboard), but implementation (and enforcement) of EU rules remains an area for improvement. In the context of preparagraphtion for the Lisbon European Council, we are pressing for an environment in the EU which will help SMEs flourish, by removing trade barriers, giving greater access to venture capital and reducing regulatory burdens. In this preparagraphtion we are working together closely with SME representatives.

  (e)   Harmonisation and mutual recognition of Standards

  The Government agrees that standard setting is one of the key components of the Single Market. Standards have contributed to the competitiveness of the industry, including SMEs, and also promoted trade. The Government strongly supports the European Council Resolution of 28 October 1999, on the Role of Standardisation in Europe and will work with the Commission, other member States and the British Standards Institution to address the new challenges. The Resolution is directed at encouraging and assisting further progress for the success of standardisation in the future by building on existing structures in Europe. European standards bodies have been invited to constantly update their policies to meet the requirements of the market. As an aid to SMEs, the European Standards Organisations have established a website providing easy access to information about standards in support of European legislation. (

  The Government strongly supports a European Council Resolution of 28 October 1999 on Mutual Recognition in the context of the follow-up to the Action Plan for the Single Market. This is aimed at improving mutual recognition and the Government will work with other member States and the Commission to strengthen its application. This will include further education and training of national authorities, providing information to business about it's rights under the EC Treaty and further data gathering and monitoring to identify instances where free movement is prevented. The Department of Trade and Industry's Action Single Market Unit helps UK companies and citizens, particularly SMEs, overcome problems caused by Trade barriers in other EU and EEA countries. This is a free and confidential service; further details can be obtained by telephoning: 0171 215 4212.

  (f)   Access to finance. The Government recognises that finance markets are particularly dynamic. It believes that any intervention therefore needs to be carefully monitored to ensure it remains relevant to market conditions. The Enterprise Fund is designed to provide just that flexibility in the UK.

  Any EU-wide loan guarantee portfolio would need to take account of the considerable differences between the operation of the finance markets in different Member States. National measures may therefore be the most appropriate in this area.

  (g)   The Regulatory Burden on SMEs

  The Government places a high priority on reducing the burden of regulation on business, particularly small business. Its policy is to regulate only where necessary, and then in accordance with the principles of good regulation—transparency, accountability, targeting, consistency and proportionality. In this way it will avoid rules and regulations which stifle creativity and entrepreneurship, whilst maintaining a proper level of protection for people and the environment.

  The Government is to set up the Small Business Service (SBS), as explained elsewhere in this response, one of whose principal tasks will be to help small-and medium-sized businesses overcome the barriers to their success. Departments will be required to consult the SBS on all regulatory proposals likely to affect small firms at the earliest possible stage. The SBS will work with regulatory departments to help them implement the "think small first" philosophy, so that they produce regulations that are easy to understand, easy to comply with and difficult to avoid. The SBS will work with small firms and other interested parties to help it focus on the regulations that really matter, including those emerging from the European Union, and looking particularly at whether the proposal would have a disproportionate effect on small business.

  The Cabinet Office Regulatory Impact Unit (RIU) publishes guidance to government departments on regulation. A Guide to Better European Regulation already exists. Its Better Regulation Guide will be revised in the first months of 2000, taking account of the role of the SBS. The RIU and the SBS will work closely together to explore ways in which the administrative burden of regulation can be minimised. Apart from promoting stronger awareness, they will keep under review new concepts and policies for achieving that objective.

  (h)   Information for SMEs. Small Businesses make a vital contribution to the UK economy and we are working to ensure that Government helps to foster an environment and provide support which enables them to thrive. That is why the Government is establishing a Small Business Service. (SBS) The new national Gateway, described earlier in this memorandum (the response to paragraph 102 refers) should provide a major step forward in the information made available to SMEs.

  The SBS will also conduct a comprehensive review of business support, looking at existing services and future trends. This will inform development of the SBS information and service portfolio, identify wasteful duplication and cut customer confusion. Any new information services will address clearly identified market failures.

  (i)   Institutional Structures. The reorganisation of the Commission has meant that SME policy is now more central to the Commission's overall enterprise strategy. This is significant in bringing together all the key issues affecting SMEs. The Commission's Action Plan in response to the Business Environment Simplification Taskforce (BEST) is another example of how the Commission is looking widely in its efforts to take forward the SME and Enterprise agendas.

  There is no clear case for a European Small Business Agency, as most support for SMEs is provided at Member State level. The existing legal and political structures don't readily allow for an advocate for SMEs in the way that there is in the US, either at EU or UK level. The SBS Chief Executive and the Chairman of the Small Business Council, set up to advise the SBS, will most closely fulfil this role at UK level.

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