Thursday, 26 March 2015
Boost for Firms as Small Business Act Becomes Law
Measures designed to make the UK the best place in the world to start and grow a business have become law following Royal Assent for the Small Business, Enterprise and Employment Act being given today.
The wide-ranging Act paves the way for businesses to get improved access to finance, creates fairer provision for tied pub tenants and puts an end to zero hours exclusivity clauses.
With more than five million businesses in the UK, the Act will open up new opportunities for small firms to innovate, grow and create jobs.
Business Secretary Vince Cable said: “Small businesses provide jobs for millions of people across the country and are driving the economic recovery. The Small Business Act will create the right environment for small businesses to continue to thrive by giving them greater access to finance to help them innovate and grow, and make it easier for them to export goods and services made in Britain.
“The Bill’s measures also mean there is nowhere to hide for firms who do not play by the rules, whether by abusing zero hours contracts or not paying the minimum wage.”
Business Minister Matthew Hancock said: “The Government has backed small businesses like never before to build a Britain where entrepreneurs can break the mould and take on the world.
“Coming from a small business background myself, I know first-hand how cumbersome bureaucracy can stifle your ambitions to grow.
“The Small Business Act is the first set of laws specifically to help level the playing field for small business. There really has never been a better time to start and grow a business in the UK.”
Measures Under the Act that Will Help Small Business
- Improving access to finance through increasing the availability and sources of investment for small businesses, so that they can secure the funding they need to grow
- Opening up access to small business credit data, levelling the playing field between providers and making it easier for a small business to seek a loan from a lender other than their bank
- Requiring banks to pass on details of small and mid-sized businesses they decline for a loan, with the firm's permission, to online platforms which can help match them with alternative finance providers
- Introducing 'cheque imaging' to speed up cheque clearing times and increase customer choice in ways to pay
- Increasing transparency on payment practices and policies through a tough new reporting requirement on the UK's largest companies. Increased transparency will help address the current economic imbalance in power between small and large companies - it will provide small firms with the information they need to negotiate fairer deals, and it will shine a light on poor practice
- Cutting down on red-tape by ensuring that regulations affecting business are reviewed frequently and remain effective. Unnecessary regulation gets in the way of doing business, so the Government is introducing a target for the removal of regulatory burdens to be published in each parliamentary term, holding future Governments to account and enabling small firms to grow and get on with doing business
- Appointing an independent Small Business Appeals Champion for non-economic regulators to ensure that the needs of business - particularly small firms - are taken into account with an understandable and effective appeals and complaints process
- Introducing a Pubs Code and Adjudicator to govern the relationship between large pub-owning companies and their tied tenants, bringing fairness to the sole traders and small businesses that run thousands of tied pubs across England and Wales
- Assisting small business expansion overseas, increasing the support available from UK Export Finance and widening its powers to help UK exports and exporters, making it easier for all businesses, regardless of size, to expand in the international marketplace
- Streamlining public procurement to remove barriers so that small businesses can gain better, more direct access to public sector contracts. Further measures will make it easier to raise concerns about poor procurement practices, ensuring these are small business friendly
Other Measures that Come Into Law
- Stopping abuse of zero hours contracts by preventing 'exclusivity clauses' which stop individuals from working for another employer, even if the current employer is offering no work
- Deterring employers from breaking National Minimum Wage legislation by amending the power to set the maximum penalty for under payment, so it can be calculated on a per worker basis
- Enhancing the reputation of the UK as a trusted and fair place to do business, increasing transparency around who owns and controls UK companies and helping deter and sanction those who hide their interest in UK companies to facilitate illegal activities, including through the creation of a publicly accessible register of people with significant control over a company
- Strengthening the rules on director disqualifications to widen the matters of misconduct courts must take into account when disqualifying, including conduct in overseas companies, and measures to help creditors recoup losses resulting from director misconduct
- Reforming employment tribunals by encouraging more efficient management of tribunal postponements in order to reduce delay and cost, and will introduce a penalty to ensure that employment tribunal awards are paid promptly and in full
- Streamlining insolvency law to remove unnecessary costs and ensure effective oversight of insolvency practitioners so they deliver their services at a fair and reasonable cost that reflects the work undertaken
- Providing new and improved information on learning outcomes by tracking students through education into the labour market, fostering self-improvement by schools, colleges and higher education providers and informing government policy