This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Introduction Good morning. I’m delighted to have the chance to speak to you today. What is the role of government in seeking a stronger, …
Good morning. I’m delighted to have the chance to speak to you today.
What is the role of government in seeking a stronger, growing economy?
I believe that our role is to create a stable long term framework. One that gives business and investors the confidence to start a business, invest in and to grow a business.
Not to tinker and meddle, but instead to be an effective partner so that business - large and small - can get on with its job. After all, it’s not government that creates wealth, it’s you and your members.
As a government we are committed to enabling the economy to grow. But at the same time we have to make the economy more resilient, by ending our reliance on a just a few business sectors.
So a vital part of our growth strategy is to help re-balance the economy, beyond just financial services and beyond the greater south east.
Last year we started with firm action to tackle the record public sector budget deficit and restore confidence in UK Plc - because confidence is the bedrock of economic growth. But our plans are carefully designed to protect vital investments in Britain’s economic fabric.
We are committed to investing in UK infrastructure in order to help UK businesses keep on the move. We will create the best super-fast broadband network in Europe by 2015. And we will build the next High Speed rail link, to increase connections between London, Birmingham and the North.
Corporate taxes are being overhauled so they are lower and simpler, and reward endeavour. Corporation tax rates will fall to 24% by 2014; while the small firm’s rate is being cut to 20p.
We are also increasing the entrepreneur’s relief rate for Capital Gains Tax from £2m to £5m - a real boon for the hard-working SME owners who will galvanise future growth.
And we are getting a grip on the unnecessary red tape and bureaucracy that weighs so heavily on business in this country, choking innovation and stifling growth.
Access to finance is another major concern, especially for small firms. So we are extending the enterprise finance guarantee scheme, making around £2billion available; and putting a further £200million into enterprise capital funds to support equity investments in high-growth firms.
Thanks to the Project Merlin agreement recently struck with the major banks, we have also secured £190bn of new credit in 2011, £76bn of which will be new lending capacity for SMEs.
But this is just the beginning. We realise there is a still a way to go before our firms are set free to compete with our international rivals.
That’s why we launched the Growth Review, a root-and-branch analysis of the barriers to growth, and the structural reforms needed to encourage a balanced, sustainable economy.
This work will be at the heart of the Budget later this month, which the Prime Minister has promised will be the most pro-growth, pro-enterprise Budget this country has seen for a generation.
Already the Chancellor has announced that he will set out plans for a new generation of enterprise zones, across parts of Britain that have missed out in the last ten years.
These zones - based on the model first pioneered in the 1980s - will be centres for new businesses and new jobs, where taxes will be even lower and restrictions on growth, such as the sclerotic planning system, will be removed.
They will be located in areas with great economic potential - but which need that extra push from that comes from Government and local communities working together.
Bigger Better Business
I started my own business at the bottom of the last recession, so I know we need to make it as easy as possible to start and run a successful company.
I also understand the thrill of striking out on your own. There really is nothing like it - the excitement; the challenge; the sense of achievement when you win a deal or make a sale.
But every new entrepreneur needs advice and support as they get their business off the ground.
And there’s no better way of learning the ropes than by talking to other experienced people who have been there and done it. Getting advice, trying out ideas, learning from other people who know what really works.
So our new approach, modernising and improving business support, will harness the expertise of experienced business men and women to provide expert support.
New facilities will include online business information, a national contact centre and a 40,000-strong national network of experienced business mentors, to offer business coaching and practical advice.
But we can’t just stand back once a business has got off the ground - we need to help British businesses to flourish and grow.
So investment in innovation - even in this tough economic climate - must be a priority.
That’s exactly why we are ring-fencing the science budget and holding it at £4.6 billion a year.
And it is why we have unveiled ambitious plans to invest £200m in a network of Technology and Innovation Centres.
The centres are based on models used in some of the most dynamic economies around the world. Countries like Taiwan and South Korea have invested in cutting-edge research and transformed their whole industrial base.
They have moved from low grade processing to the high-end, high-value industry that is so successful in Britain, and which we want to expand.
So the Centres will support businesses doing in-house research, and provide access for smaller companies to specialist equipment they could not otherwise afford. They will help British firms get world-beating new technologies out of the laboratory and into the marketplace.
Skills and Growth & Innovation Fund
Of course, it’s not just a question of attracting young people into the sector. Once they have started, industry must ensure so their careers can flourish.
Of course, to succeed globally, British companies need to attract skilled workers and then ensure they get the training they need to stay ahead of the pack.
So we are setting further education colleges free from bureaucratic control by Whitehall. We want to ensure they support economic growth by responding to the needs of employers and learners - and not the whims of politicians and bureaucrats.
We are also increasing funding for adult Apprenticeships by up to £250 million by the end of the Spending Review period, creating up to 75,000 more places per year than the previous Government.
Our aim is to empower employers to shape the skills system, not just advise on how it should look. Our vision is of a future where all employers and individuals know that raising skill levels is crucial to growing the economy.
That’s why, on Monday, my department launched the £50 million a year Growth and Innovation Fund.
We are inviting applications that take an ambitious, imaginative approach to boosting vocational skills. Government will match employers’ investments in projects that are intended to raise skills in their sectors - enabling more businesses to reach their full growth potential.
The Growth and Innovation Fund is open to ambitious bids from Trade Associations. My Department has already contacted many of you to encourage you to collaborate with employers and other groups in your sectors, so together you may design the strongest programmes possible.
I urge all of you to grasp this opportunity.
This investment fund will become a feature of how we - industry and Government - work together on skills over the coming years.
And I hope our partnership will be just as strong right across the board.
Because the Coalition Government is committed to working with UK business to put enterprise at the very heart of a strong and balanced British economy.
I believe we have made a good start. But I am well aware that we still have a long road ahead.
That’s why we are committed to be a real partner for business - charting a course for the next decade so your members can plan and invest with confidence for the long term.