The Forum of Private Business has written to the Prime Minister to protest at the lack of small business representation on the Government's business advisory group.
This advisory body is a small group of business leaders from sectors of strategic importance to the UK that provides regular, high-level advice to the Prime Minister. However, with no SME representative, 99% of businesses are not represented, the FPB has warned.
In addition, the Forum said that another strategic business advisory group - the Chancellor's "Star Chamber" - made a similar mistake but it addressed the problem by co-opting John Wright, a former Federation of Small Businesses (FSB) chairman, onto the group.
Ian Cass, the Forum's managing director, has called for "greater [Government] engagement with the UK's 1.2 million micro, small and medium-sized businesses".
He said: "Once can be considered an oversight, but twice? We do not doubt the competence and quality of the individuals involved, but their experience of current legislation, supply chain issues and even the tax system are based on corporate life and not that of businesses with limited resources."
In particular, Cass has highlighted the issue of red tape facing SMEs. "A large problem with red tape is that best practice from the corporate or public sector has been foisted on smaller firms where the owner is often present in the workplace and so does not need to compile managerial reports for head office," he said. "Over the last two years SME regulation has increased by 8% despite a continuing deregulation agenda."
Meanwhile, the Institute of Directors (IoD) has urged the Government to "play its part" in unlocking billions of pounds in potential small business investment.
The IoD is asking the Government to promote the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) to make it easier for more people to invest in new and growing businesses.
The latest Government figures show that more than £1.5 billion was invested in 2,700 companies through the schemes in 2013/14, with more than 100,000 investors taking part.
Jimmy McLoughlin, IoD deputy director of policy, said: "Investing in a business should be as easy as opening an ISA. But for millions of people this isn't the case. The process is excessively complicated, time consuming and daunting. The Government needs to play its part in encouraging a step-change in the way investment schemes are regulated. EIS and SEIS should be actively promoted and made as simple as possible to invest through. If the Government is serious about helping small businesses scale up, then these are vital first steps."