Interest in small business increased in Britain in the early 1970s, when the Conservative government formed the Bolton Commission to study the situation in the small business sector and to make appropriate recommendations. The Conservatives’ desire to portray Great Britain as a “nation of owners,” thus securing massive voter support, played no small part in the development of small business.
Today small businesses account for 21 percent of domestic trade, accounting for 36 percent of the country’s workforce. One in eight adults is self-employed. The government’s budgetary (tax and credit) policy plays a significant role in stimulating small business.
Individual ministries (trade and industry, employment, environment, and energy) have developed four categories of programs to help small businesses:
- Advisory programs for new and existing firms. Special organizations, such as the Small Firms Service, have been created for this purpose. Together with the Confederation of British Industry, they offered a program of patronage for small firms in the form of advice on marketing finance management.
- Financial Assistance Programs. Special programs provide financial assistance to young people in starting or expanding their businesses, small business training for entrepreneurs, and assistance to municipal governments in creating and developing small businesses in cities.
- Regional programs to help small firms operate in Scotland, as well as in Wales and Northern Ireland. The regional programs involve the European Regional Development Fund, which helps small businesses in backward industries by stimulating job creation.
- Programs encourage the export activity of small firms. They are mainly implemented by a special body, the British Overseas Trade Association.
A department headed by a ministerial official deals with the problems of small business. It is assisted by the Ministries of Trade and Industry, the Environment, Health, Employment, and Social Security. They study the state tax policy, people’s incomes and expenses, and the general economic situation in the country, and on the basis of their findings they adopt laws concerning small and medium-sized enterprises. The government also promotes the adoption of new laws, which give additional rights to local governments regarding small firms.