The Government has unveiled the second phase of its plan for growth.
Moving on from the reforms set out during the initial stage, the Government has said that it now intends to focus on a number of areas where it is hoping to help stimulate development.
This includes looking at how to eliminate barriers and encourage greater investment in UK infrastructure.
Education and skills will also come under the spotlight, with a review of how the whole of the education system – schools, FE colleges, universities and other training providers – can best be used to maximise economic growth.
There will be an examination of logistics, covering rail, road, shipping and air freight interests, with the aim of reducing obstacles to growth and of seizing the opportunities afforded by the increasing globalisation of supply chains.
Perhaps most importantly, special attention will be given to ways and means of increasing the numbers of mid-sized businesses (those that have expanded beyond the definition of SMEs). And plans will be set in motion to boost the rural economy.
Announcing the latest stage of the strategy, Vince Cable, the Business Minister, said: “We are launching the second stage of the plan for growth with one central purpose – creating the right conditions for business to start up, invest, grow and create jobs.”
In the three months since the publication of the overall strategy, the Government has cut corporation tax by 2 per cent to 26 per cent and introduced a moratorium on new business regulation.
Other policies have seen the setting up of the Green Investment Bank, plans for 21 new enterprise zones, improved tax reliefs on new investments including reform of the Enterprise Investment Scheme, and the doubling of the lifetime limit for Entrepreneurs Relief to £10 million.
The second phase of the Growth Review will, the Government said, involve an intensive programme of engagement with business over the coming months. Based on the evidence collected, plans for growth in each review area will be presented to a Ministerial Group chaired by the Chancellor and Business Secretary, with final details due for report in the autumn.
The ambition to help smaller firms grow into mid-sized companies caught the eye of most business groups.
John Cridland, the director general of the CBI, said: “It’s good that the Government has recognised the importance to the economy of mid-sized companies with the potential to grow fast and create jobs.
“These companies can be economic dynamos, but as we have said the Government’s emphasis has traditionally been on smaller firms, with mid-sized companies a forgotten army in the UK.
“The Government also needs to look closely at news ways of accessing finance for mid-sized firms, how they can export more and what can be done to remove barriers such as regulation or tax.”
It was a point echoed by Steve Radley, director of policy at the EEF: “Whilst young businesses and start ups are important we must not ignore the wider benefits to the economy that medium and larger companies bring.
“The UK has a deficit when it comes to growing small companies into medium size and medium ones into large. Without these companies, we will struggle to tackle our economic challenges and face a speed limit on our growth potential.”
Adam Marshall, director of policy at the British Chambers of Commerce, agreed that it is essential that high-growth smaller enterprises have the chance to evolve into dynamic, larger businesses.
He commented: “For Britain’s private sector to drive growth, we need to help more small companies expand into the medium-sized business of tomorrow. At present, everything from employment legislation, finding staff with the right skills, and a risk-averse culture, gets in the way of growth.
“Medium-sized companies are often rooted in their local community, as important employers and part of local, civic life. We need more of these companies, and we challenge the government to sweep away the barriers that prevent Britain’s smaller businesses from scaling up for the future.”
