Supporting the MSB powerhouse
Business minister Anna Soubry wants MSBs to continue to grow, create jobs and drive the UK’s economy, but what about the barriers in their way, asks Business Voice
Q. How important do you think the UK’s MSBs are to the economy?
A. It’s great news that we have a record number of small businesses employing millions of people in the UK, but what many people don’t know is that the number of medium-sized businesses has grown at an even faster rate since 2000. If you look at businesses with 50-499 employees, we have 36,000 of them, creating jobs for almost 4.5 million people and more than £850bn in turnover. They are the real powerhouses of our economy – retaining the agility to respond quickly to new technologies and combining it with the experience that comes with having been around for a while.
Q. Encouraging more MSBs to scale up is clearly an issue, so what do you see as the biggest barriers to their growth – and how is the government trying to tackle these?
A. Moving into overseas markets can be a great way to grow and boost productivity, innovation rates and resilience. But taking those first steps on the export journey can be daunting. UKTI has targeted mid-sized businesses for a long time, and has worked with the CBI on many trade missions. And I’ll be at the International Festival of Business in Liverpool later this week, attending the InvestInBlue conference – a great opportunity to meet companies in our world-leading maritime sector and explore their export potential.
Last year the prime minister announced the Help to Grow scheme – administered through our British Business Bank – after we identified access to finance as a key barrier to growth. The first phase of the scheme launched in May, unlocking £30m of lending through Lloyds Banking Group specifically for ambitious firms in the manufacturing, technology and creative sectors that want to scale up. The wider finance environment continues to improve but there is some frustration with the low proportion of businesses that actually apply for finance, especially when compared to other countries like the US.
Broadband provision in many parts of the country is still not good enough for our modern businesses. That’s why the Departments for Business, Innovation and Skills and Culture, Media and Sport are carrying out a review into business broadband to look at what speeds businesses need now and in the future. I want mid-sized firms to be a key part of Britain’s digital economy and to have the tools they need to take on the world.
Q. There’s obviously a big focus on productivity at the moment. What should this debate mean to MSBs, why does it matter, and where should they look for help?
A. Productivity is one of the biggest economic challenges of our times and has been a priority of this government ever since we took office and launched our productivity plan. It’s not just an abstract economic idea but something that has a tangible impact on the living standards of people across the country.
There are no simple answers to the problem and productivity growth ultimately comes from businesses themselves. Where we can help is working with them to increase long term investment in people, capital and ideas, while making sure the environment allows them to thrive. We raised the investment allowance to its highest ever permanent level to make sure putting money back into your business is attractive option.
Q. The same goes for innovation, so does the UK have the right environment to encourage MSBs to take things to the next level?
A. The UK has a long and proud history of innovation and we need to make sure we take advantage of the new technologies that could reap great rewards. It’s something this government supports and encourages, so our forthcoming National Innovation Plan will set out just how the government will be helping to drive this agenda forward.
Through partners such as Innovate UK we have invested around £1.8bn, worked with over 7,500 companies and created over 50,000 jobs. Our approach to regulation gives a clear sign to the rest of the world that the UK is open to innovative businesses.
Q. And what’s your response to MSBs that put the blame for lack of growth or poor productivity on skills shortages?
A. We absolutely recognise there are long-standing skills shortages in certain areas, and that’s why we are so focused on boosting the quality and quantity of apprenticeships – with businesses firmly in the driving seat. The Enterprise Act which I just took through Parliament will help create the employer-led Institute for Apprenticeships and the business department will continue to consult closely with industry to make sure the apprenticeship levy works for businesses, apprentices and the UK’s future workforce.
By 2020, with the income from the levy taken into account, government spending on apprenticeships will be double the level it was in 2010 in cash terms. I’d encourage all mid-sized businesses to engage with the plans.
Q. What’s your ambition for MSBs by the end of this Parliament?
A. A lot of people know me first and foremost as the small business minister but my job is much broader than that. I want to champion all of our great British businesses, whatever their size or sector. I’d love to see the UK’s mid-sized businesses getting more global recognition, much in the way that Germany’s Mittelstand does. But the most important thing is that they continue to grow, create jobs and drive our economy forward.
Anna Soubry MP is a keynote speaker at the CBI’s MSB Summit in London on 7 July.
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