Policy-maker

Why small businesses should be a priority for the economic recovery

Rt Hon Dr Vince Cable MP guest blogs for the BCC.

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Rt Hon Dr Vince Cable MP, Secretary of State for Business, Innovation and Skills

24 Mar 2014

We are beginning to see signs that a real recovery is taking place and confidence among businesses and consumers is starting to grow. Indeed, the latest figures from the British Chambers of Commerce (BCC) show us we can expect growth rates exceeding those prior to 2008. This is good news, and is helping to restore optimism after six years of economic stagnation.

But we must not be complacent, or become reliant again on an economy driven by the financial sector. Now is the time to make sure that we have the right kind of growth – a balanced economy that is sustainable in the long term.

An economy that creates careers as well as jobs, encourages innovation and investment from within the UK and from abroad. That is why the government has identified small businesses, the lifeblood of the economy, as a priority and why I am especially looking forward to addressing the British Chambers of Commerce’s Annual Conference on 1 April – an organisation that represents tens of thousands of businesses large and small.

Access to finance is crucial, which is why we are pushing the banks to make greater use of the Enterprise Finance Guarantee scheme, and lending to SMEs through the scheme is now at its highest for three years

We are well underway with setting up the British Business Bank, which has £2.9bn from existing Government schemes plus £1bn of new capital to spend. We expect this money to unlock up to £10bn for SMEs over the next five years.

As the economy expands we are reforming employment laws to simplify the process of taking on and managing staff, while reducing red tape, which has already helped businesses save as much as £1bn.

For further sustainable growth my hope is that by the end of 2014 many more UK firms will start exporting and be feeling the benefits. Firms that begin to export gain 34 per cent uplift in productivity and achieve stronger financial performance. Put simply, exporters enjoy levels of growth and economies of scale not possible domestically.

A lot of this is common sense. If you find new markets, you will sell more, extend the commercial lifespan of your products and services, and also the return on your investment in Research and Development. This is made all the easier through the support of UK Trade and Investment, which has routes into more than 100 markets worldwide and is already helping countless small and medium sized businesses to access them.

With almost half a million small businesses created last year and more being created every day, it’s important we have the right kind of support and advice that not only helps them get a firm footing in the business world, but is able to help them further down the line when they want to expand.

I want small businesses to be the front and centre of our economic recovery, showing the world why the UK is the best place to start and grow a business.

All views expressed in guest blogs are that of the authors, and not of the British Chambers of Commerce. 

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