The Federation of Small Businesses (FSB) is aimed at companies of fewer than 200 employees, with sole traders comprising one third of its 150,000 members. It offers its members effective lobbying and a range of business benefits, and is very well connected, having links with Patricia Hewitt MP, the Minister for Small Business and Ecommerce, and David Irwin, chief executive of the Small Business Service.
Stephen Alambritis, senior press officer at the FSB, said political links come with the territory. "We are always courted by the opposition, but we are non-partisan. When the Tories were in power we lobbied about the exchange rate mechanism, interest rates [and] banks' treatment of small businesses. Now, the Tories come to us as they are looking to develop policies. Our job is to make sure all [political] parties want to be the party of the small business."
He said the FSB has clout because it's the UK's biggest confederation of businesses, pointing out that membership figures for the Confederation of British Industry, for example, include trade organisations.
The FSB acknowledges that there is always going to be some difficulty in attracting small businesses pressed for time to attend out of office events. An introduction on its website says: "The very nature of self-employment (and thus self-motivation) indicates that its exponents have certain innate qualities. Among these are individuality, independence, commitment and sheer bloody-mindedness. Given the first and last of these, it is perhaps a minor miracle that so many disparate free spirits could be welded into the coherent whole that is today's 150,000 strong Federation of Small Businesses."
Alambritis describes the FSB as a very active organisation with 2000 campaigners nationwide representing it on various committees and quangos. Structurally, it is based on a series of regional branches, with the traditional hierarchy of chairman, treasurer, etc. It represents over 400 different trades but does not distinguish between the market sectors of its members.
"We aim to make sure that the political and financial climate is favourable to all small businesses. We may go down the route of offering specific services to different sectors as we grow, but as there are organisations to represent trades, such as the Institute of Plumbers and the Housebuilders Federation, we have to make sure we would not be re-inventing the wheel," he said.
Cutting red tape
Bureaucracy is firmly at the top of the FSB's lobbying agenda this summer, and it has presented a dossier to Cabinet Minister Mo Mowlam giving specific examples of how small businesses are being strangled by red tape. It describes small firms as unpaid collectors of income tax, National Insurance contributions and VAT on behalf of the government, and also as having to fund such benefits as statutory sick pay and maternity pay.
On 1 August, the FSB supported the one-day petrol boycott which sought a freeze on petrol prices and excise duty, and it is currently working on submissions for the government's pre-election budget. Other key policies of the FSB, however, put it at odds with New Labour.
It maintains that the UK's entry into the single currency is not inevitable or desirable, and has signed up to the Business for Sterling organisation which is opposed to such a move.
With regard to the Employment Relations Bill - the result of the Fairness at Work white paper published in the summer of 1998 - the FSB maintains that the exemption for firms with 20 employees or less from having to recognise unions will stifle growth in some firms on the cusp of the limit. It recommends that the exemption should be for companies with 50 or less workers.
The government's intention to replace Family Credit with Working Families Tax Credit (WFTC) and Disabled Persons Tax Credit, and for them to be paid through the wage packet from October 2000, has also come under fire. The FSB proposes that an agency should be set up to deal with the payment of welfare benefits rather than passing the responsibility on to employers.
The FSB has also said that the Late Payment of Commercial Debts (Interest) Act will not improve payment times for small businesses, and that access to court should be made cheaper and simpler - neither of which it believes the Act will achieve.
Fees and benefits
Membership fees for the FSB are scaled to the size of an organisation. These range from a £70-£200 annual subscription for up to 20 employees, to £650 for 151-199 employees. There is a £30 registration fee.
The FSB says the membership package it offers would cost over £500 to source externally. Benefits include:
- A telephone service giving access to legal, business and personal advice, as well as help with tax, VAT and dealing with the Department of Social Security (DSS).
- Payment of legal and accountancy costs up to £50,000 incurred in dealing with an in-depth Inland Revenue investigation.
- Payment of legal and accountancy costs up to £50,000 per claim in appeals to VAT tribunals and thereafter to the courts.
- Payment of up to £100 per day if an employee is called for jury service, with a maximum of £1000 per claim.
- Help with employment disputes, data protection claims and criminal prosecutions in connection with a member's business.
- Payment of legal fees up to £50,000 per claim in defending motoring prosecutions.
- Payment of professional fees and expenses incurred in representing a company following a PAYE audit in which the Inland Revenue or DSS express dissatisfaction with PAYE records.
- Listing in an online directory.
- A standard internet package priced at £599 (ex VAT) for account set-up and website creation, with a £25 (ex VAT) per month hosting charge.
- A range of chargeable internet services, provided by CobWeb, for more complex solutions including trading online.
The primary way of getting your voice heard at the FSB once you are a member is to attend its regional bi-monthly meetings, but it invites additional input from members in a variety of ways. At present it is running a survey - Barriers to Growth - on its website which had attracted 25,000 responses at the end of July.
There is also an electronic newsletter for members via the website, offering the opportunity for discussion and contributions to the direction of the FSB, and an IT section aiming to help small businesses deal with problems such as getting online, ISDN, viruses and Linux.
The FSB can be contacted on 01253 336000.
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