A BODY representing the manufacturing sector has welcomed signs of progress in two areas it says are vital to small firms.

EEF says small and medium-sized enterprises (SMEs) are the bedrock of supply chains which feed into larger firms, accounting for 60% of the private sector workforce.

EEF regional director David Ost said: “They tend to be highly agile, have close relationships with their customers and are quick to respond to market needs. For this reason, their needs must be at the forefront of policymakers’ minds in terms of issues such as tax regulation, access to finance and ensuring they can get the skills they need.”

He added: “Two critical issues are regulation and access to finance where there are some promising signs.”

He said as banks have rebuilt their balance sheets SMEs have found it difficult to get access to finance and when they do the terms and conditions can be tough: “Tackling this is crucial if companies are to invest and grow and create the jobs we urgently need.

“The Independent Banking Commission report provides a welcome first start, and the Government must now be bold and use this opportunity to bring greater competition to the sector.

“There have also been positive signs on regulation, with Government absolving SMEs from new regulations and setting up the red tape challenge.”