It’s a great pleasure to be here today to celebrate the many successes that Black Country businesses have chalked up over the past year.
I believe it is important to recognise the achievements of our entrepreneurs. So I would like to start by congratulating the Black Country Chamber of Commerce for organising these awards.
This part of the country has a huge amount to be proud of. The Black Country is one of Britain’s industrial heartlands - towns such as Dudley and Sandwell, Walsall and Wolverhampton, have a rich industrial heritage.
And I am confident this area has a bright economic future, too. Because this Government - the Coalition Government - understands that business is the dynamo that will power our future economic growth. That the innovation and the creativity of the private sector will underpin Britain’s future competitiveness.
So we are completely committed to dismantling the barriers preventing businesses in the Black Country from growing and expanding. And ensuring that the wealth of entrepreneurial talent, creativity and ingenuity that exists here can be set free.
I say that as someone who started my own company at the bottom of the last recession. So I understand the huge challenges that small businesses are facing, as we emerge from the deepest and longest recession since the war.
Many companies are grappling with sluggish demand, constraints on access to finance, and a business environment that all too often stifles, rather than stimulates, entrepreneurship.
The role of Government
I believe the job of Government is not to tinker and meddle in how businesses are run; it is instead to create a stable, long-term framework, within which companies can have the confidence to invest.
Not to pick winners, but to create the right business environment, in which the best will flourish. In short, this Government wants to be a real partner for business and industry.
That means a simple, more predictable tax system that rewards endeavour; better access to both debt and equity finance; less red tape and fewer regulators; a skilled workforce, and more apprenticeships; sustainable investment in our infrastructure; and support for exports to markets around the globe.
In all of these areas, Government has an important role to play in creating the right conditions so companies can expand and grow. We fully intend to play it.
We have an unwavering commitment to rebuilding and rebalancing Britain’s economy, so we can recover and grow once more.
As the events of the past two years have made painfully clear, we must leave behind the over-reliance on financial services in the South East, and instead support the renewal and diversification of our industrial base across the country.
That means building the knowledge base and investing in modern manufacturing industries and growth sectors in the real economy.
We also need to spread the word to our international partners that Britain is once again open for business - and we are ready once more to sell our knowledge to the world.
But our first priority must be to restore confidence in the UK’s public finances - because confidence is the bedrock of economic growth.
That’s why the Chancellor George Osborne outlined tough measures, involving some painful decisions, in his emergency Budget in June. Without confidence, investors will not come to the UK, businesses will not expand, and individuals will not learn the new skills they need. So we have to get to grips with our record budget deficit, currently running at over 11% of GDP.
At the same time, the Chancellor began the important task of making Britain a business-friendly country once again. This Government is determined to make Britain one of the best places in the world to start and run a business.
Nowhere is this task more urgent than in the tax system, which has grown increasingly complex and burdensome. So we brought forward reforms to ensure that businesses once again benefit from a simple, more predictable and stable tax system saving time and compliance costs.
We are cutting the main rate of corporation tax from 28% to 24% over four years, so by 2014 this country will have one of the lowest rates of any major Western economy.
We are also reducing the small firms’ rate to 20% - instead of increasing it to 22%, as planned by the previous administration.
On capital gains, too, we are protecting businesses. The 10% Entrepreneurs relief rate is being substantially increased, from the first £2m of gains to the first £5m of gains, so individuals can enjoy the rewards of their endeavours.
And we are extending a lifeline to small businesses struggling to get the finance they need. In the Budget, we extended the Enterprise Finance Guarantee scheme by an extra £200 million to help up to a further 2,000 viable firms.
But this is a short term measure to deal with the immediate problem. We also need to tackle the underlying causes.
Increasing the availability of debt and equity finance to fundamentally sound businesses is one of the Coalition’s top priorities. The UK’s economic recovery depends upon it. So in July, we published a green paper, ‘Financing a Private Sector Recovery’, setting out the way forward.
The green paper outlines a number of options to unblock the flow of credit and ensure firms can finance investment and expansion. These include greater use of equity; encouraging venture capital and ‘business angels’ to invest in a wider range of businesses; and a responsible return to securitisation.
It also considers ways of making bank-lending decisions more transparent, and of fostering competition between banks and other financial providers.
Widening the range of available finance options will give businesses more choice, and consequently greater bargaining power, when negotiating the terms of loans and investments.
But our focus is on finding industry and market-led solutions to the current failures of provision. Government will intervene only where it is necessary to meet a real need, and only as a last resort. Our pledge is to ensure that the market functions effectively - not to replace it.
The skills agenda is another area where we are acting to address failures in provision.
We have redirected £150m to create up to 50,000 extra workplace-based and employer-led apprenticeships.
We are setting further education colleges free from bureaucratic control by Whitehall.
And we are currently consulting on the future of the skills and training regime. We want to ensure it supports economic growth by responding to the needs of employers and learners - and not the whims of politicians and bureaucrats.
That will involve simplifying the system so companies and individuals can access the vocational training they require; and directing funding where it can be most effective. Our final conclusions will be published after next month’s Spending Review.
Elsewhere, we have acted decisively to cut the amount of unnecessary red tape emanating from Whitehall, to save industry time and money. As a former businessman myself, I know how regulation chokes innovation and stifles growth. It has become a huge problem, especially for small businesses, and we are determined to cut it. Not make it slightly better by tinkering at the edges; cut it.
So, from the beginning of this month, we have adopted a new ‘one in, one out’ system of control. It means that before a Minister can introduce a new regulation, he or she must first demonstrate that they have cut the existing burden. This means we can first cap, and then start to cut, the cumulative burden of regulation.
And we have also announced a fundamental review of those regulations we inherited, which, if they were implemented in full, could another £5bn.
Together, these measures will begin the process of changing, not just a few regulations, but the very culture of Whitehall. Clearly this task will not be completed overnight or even within a year. And I am acutely aware, having been a businessman myself, that we have heard from politicians of all parties great promises in this area.
So let me be clear. This Government is determined to ensure the decision to regulate business should not be the first option. It must always be the last resort.
Backing the Black Country
This is a tangible sign of our wholehearted backing for business, here in the Black Country and elsewhere. Another is the £1 billion Regional Growth Fund. It will run for two years and help businesses with high growth potential to expand, providing the jobs needed to release local economies from their historic over-reliance on the state.
New start-ups in this part of the country will be exempt from paying national insurance contributions on their first 10 employees, so they can take on new staff without incurring extra costs.
We have also set out a package of measures designed to encourage entrepreneurs and set them free, so they can get back to the day job - running their company.
Reforming business support
We will do everything we can to help our entrepreneurs succeed. But these efforts must be rooted in the real economic geography of the country; not twisted to fit existing administrative structures, which have arbitrary boundaries, such as the Regional Development Agencies.
The RDAs were established to close the gap in economic growth between the Greater South East and the rest of England. Instead that gap has grown. Clearly, the policy has failed.
So we are replacing RDAs with Local Enterprise Partnerships, which will bring together the local business community and local authorities.
Our objective is to encourage strong local leadership to promote economic growth, based on institutions which match the economic reality on the ground and have the freedom, and responsiveness, to make a real impact.
And state agencies are not the only way of strengthening local economies.
That’s why networks like the local Chambers of Commerce, like this one in the Black Country, are so important. They can offer invaluable help - with mentoring, with fresh ideas, and with making new business contacts.
There is no better way to learn about running a business than from the people who are doing it themselves - sharing ideas, and finding out what works. It is also an excellent way of inspiring people, and giving them the confidence to strike out on their own.
That’s one of the reasons we are keen to encourage business mentoring. It’s a tried and tested method of supporting businesses to grow sustainably.
It is vital that more individuals go into business for themselves. If our economy is to recover and grow, we need to unleash the entrepreneurial talent that exists in people from all walks of life.
So, while I recognise that many businesses are still feeling the after-shocks of the recession, I am positive about the many opportunities that lie ahead.
And Government has an important role to play, if we are to achieve our ambition of making this the most entrepreneurial decade in our nation’s history.
That means creating the right conditions for economic growth. A simple tax system that rewards enterprise; better access to finance; less bureaucracy and fewer regulators; and business support services that reflect local economic geography.
If we in Government do our part, the awards finalists here today show just how much can be achieved, with a bright business idea pursued with passion and determination. I am sure you will serve as an inspiration to others. Congratulations to you all - and may I wish you even greater success in the future.