This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
'Government has put in place policies that help hard work and entrepreneurial spirit to flourish', says Chief Secretary to the Treasury.
Good afternoon – it’s a real pleasure to be here at the Saïd Business School. When I was studying in this city, there was nothing quite like this.
Today people see business as something worthy of study. It’s demanding, exciting, and challenging. To some it’s an art. To others it’s a science.
The world has glittering prizes to offer – a phase first used in 1923 by F E Smith, a graduate of this university, and still relevant now. And these prizes are increasingly being won by alumni of business schools.
According to the FT, ‘10 years after graduation, one in four alumni surveyed held executive-level positions in their companies’. 5 percent had titles beginning with “Chief”! I quote that not merely because of the startling figures, but because of an interesting use of language. “Positions in their companies.” That is, the companies – typically big multinationals – that those business school graduates are working for.
I don’t believe that’s quite kept up with the times.
My suspicion is that, for many of you in this room, your aspiration will go beyond working your way up the corporate ladder.
Rather, your dream may well be to start your own business.
To nurture it. To expand it. And to make it a powerful force.
And you’d be in good company.
Think of Wafic Saïd, who helped found this institution and has donated over £70 million to it. He spent the first four years of his career in Swiss banks, then moved to London where he set up two restaurants, then two years later set up a civil engineering and telecommunications business in Saudi Arabia.
Or Sergey Evlanchik, who, after studying here, set up a dairy producer which became the first company in the history of Ukraine to be listed on the London Stock Exchange.
Or Alyson Goodner, who graduated in 2008 and founded teacherplanit, a collaborative website helping teachers, administrators and students share information.
Business start small. Google famously started in a garage. William Morris – such a key figure in Oxford history – started his business repairing bicycles in a shed at the back of his parents’ house at the age of 16.
That is the spirit of enterprise. That is the spirit which we want you to harness.
Today, I can say that Britain has become a business-creating powerhouse.
At the start of 2014, the UK had a record 5.2 million private sector businesses: 760,000 more than at the start of 2010.
99.9% of those businesses are SMEs – small and medium-sized enterprises, with fewer than 250 employees.
We’ve had over 2 million startups in Great Britain since 2010. And the highest rate in Europe of adults starting or running a new business.
Indeed, the Global Entrepreneurship and Development Institute calls us the most entrepreneurial economy in Europe. And just last year we moved up five places in their global index of entrepreneurship.
That success is down to the hard work and flair of hundreds of thousands of workers and entrepreneurs. But government has played its part too.
As the Imperial College Business School puts it: our improvement in entrepreneurial performance “is linked with an improvement in UK support for entrepreneurs”.
The government has put in place policies that have helped create the right economic conditions for that hard work and entrepreneurial spirit to flourish.
Freedom has been at the heart of this.
Freedom of speech; freedom of expression; freedom of movement. Freedom to create. Freedom to innovate. And freedom to reap the rewards of entrepreneurship.
That’s why we’ve taken bold steps on taxation, skills, and regional investment: both to make work pay, and to allow business to flourish.
After all, governments don’t create jobs and wealth. No – it is people like so many of you in this room who do that. All we can do is help. So we have.
Let’s imagine you have a great idea for a business. But you need the funding. Where do you go?
We’ve set up the British Business Bank to help. Already, it has supported more than £3billion of lending and investments, benefitting over 43,000 smaller businesses.
Just in Oxford, initiatives supported by the business bank ave helped Oxsonix advance a new means of non-invasive drug delivery using ultrasound; it’s helped Keit develop a new generation of compact spectrometers; and it’s helped Organox’s production of a medical devise for preserving organs prior to transplant.
The Bank provides a variety of programmes – debt, equity and guarantees – to meet SMEs’ finance needs.
So, among those programmes, the Start-up Loans programme supports entrepreneurs looking to start their own business. Over 25,000 loans totalling over £130m have been made since it launched in April 2012.
There are funds which make equity investments. Funds which co-invest alongside private investors. Funds which work with business angel syndicates. And programmes providing high quality mentoring as you get off the ground.
Now I know that if you’re starting out, then some lenders will say “you don’t have enough security; you don’t have enough of a track record”. So our Enterprise Finance Guarantee helps lenders provide debt finance to exactly those small businesses.
We’ve expanded tax-advantaged venture capital schemes, and launched the Seed Enterprise Investment Scheme, which in its first two years helped over 2,000 companies raise over £175million.
We’ve also created a fund for Community Development Finance Institutions (CDFIs) to lend to businesses from disadvantaged areas and groups. The fund has so far lent to 17 enterprise lending CFDIs.
And today, I am delighted to announce that the British Business Bank is commissioning new, independent research to facilitate a report on the sustainability of the CDFI sector. The report will be published in June.
I have been excited by the progress that CDFIs have made over the past few years. It is impressive that CDFIs lent £72m to SMEs and microbusinesses last year, creating over 15,000 new jobs.
Just today I’ve been visiting some of the great initiatives in Oxford which have benefitted from this funding.
But we need to know more about this sector, because CDFIs have an important role in lending to viable businesses that might struggle to access finance from mainstream providers.
It’s the Heineken approach: reaching the parts that others can’t reach.
This is why we are having this independent report: to make recommendations to government on how to improve the sustainability of CDFIs – and how to make them work even better for our small businesses.
So once you’re up and running, what else can we do to help you grow and succeed?
To help you reach the next level, we’ve set up GrowthAccelerator, a £200 million programme coaching small businesses to overcome the barriers to high growth. It’s already on track to create over 55,000 jobs and deliver over £2.2 billion in economic growth within 3 years.
Specifically for industry, we’ve committed £1.6bn, match funded by industry, to support our automotive, agricultural, and automotive industries.
And we have put £345m into the Advanced Manufacturing Supply Chain Initiative (AMSCI) to support the repatriation, strengthening and growth of advanced manufacturing supply chains in this country.
Today, I visited Biomedica, based here in the Oxford Science Park. They manufacture gene and cell-based therapies that have the potential to transform medicine. We’ve given them £7.1 million through AMSCI – which has help them win a major contract and take on new highly-skilled local staff.
A great success story, which we’ve made possible.
Once you’re an established businesses, you will of course want to operate in as competitive a tax system as you can.
The government has given the UK the lowest corporation tax rate in the G7 – and from April it will fall again, to be the joint lowest rate in the G20. Analysis by HMRC and the Treasury suggest these corporate tax reductions will increase investment by 2.5-4.5% in the long term.
Specifically for small business, we’ve extended the doubling of the Small Business Rate Relief. We’ve extended tax credits for research and development. And, last December, we expanded our business rates support package, benefitting all ratepayers but particularly small businesses and retailers.
Once you’re growing, you may well want to take on more staff. We will support you.
That’s why we introduced a £2,000 Employment Allowance for businesses to reduce their employer National Insurance Contributions (NICs) bill each year. As a result, around half a million employers have been taken out of paying NIC altogether.
You need to know that there is a strong pool of skilled staff available. The commitment to education as a driver of opportunity and of social mobility is one of my passions. Over the years, far too many young people have left the education system without even the basic skills they need to thrive.
That’s why we’ve invested in the pupil premium in schools, in early years education, massively expanded apprenticeships, and successfully provided better support for kids from disadvantaged backgrounds to get to university.
Our economic growth needs to be based on a more balanced, innovative, and low carbon model too.
So, we’ve been supporting local growth through cities and growth deals, incentivising the green economy through the Green Investment Bank and the energy market reforms. We’ll help you export too.
Exports are one of the UK success stories. We not only export cheese to France but we export chocolate to Mexico, sushi to Japan, mussels to Brussels and sand to Saudi Arabia.
But there’s more work to do in the SME sector – not least to fulfil our ambition of increasing the number of SME exporters.
We have helped UKTI almost double the number of businesses it supports over the course of this Parliament.
And we have extended the product range of UK Export Finance, making it one of the most competitive export credit agencies in Europe. Since 2010 it has provided £13.9bn of export support.
So if you run your business, whether you’re large or small, whether you serve local needs or whether you export to the other size of the world, whether you build or invent or assemble or consult: we are on your side.