Support needed for mid-sized firms
CBI chief demands tax review to help entrepreneurs
New CBI director general Carolyn Fairbairn will today call for more support for Britain’s mid-sized firms, including a review of the tax system to help entrepreneurs.
In her first keynote speech since taking up the job last week, Ms Fairbairn will call for a range of supporting measures to help boost a sector with contributed £59 bi lion to the UK economy between 2010 and 2013. She will claim MSBs (mid-sized businesses) make the difference between recession and recovery.
Speaking at the CBI’s MSB Summit in London – in partnership with Lloyds Bank – she will say that leveraging more MSB potential can propel even stronger economic growth for the UK. If the 2010-2013 scale-up rate (11%) had matched the 2005-2008 rate (15%), the £59 billion contribution would have reached £85.6bn.
Launching a new CBI report, in partnership with Lloyds Bank and Experian, Life in the Fast Lane, she will reveal that seven out of ten scale-ups are located outside London and they include firms spanning all sectors and ages.
These scale-ups are growing at an average rate of 20% each year for three years and Ms Fairbairn will argue that while they make up only 2% of UK business, they are responsible for 1 in 6 jobs and generate nearly a quarter of private sector revenue and should be celebrated and supported.
“As a country, we’re good at telling the beginning of the story. The traditional story of “start-up Britain”, a single person, with a single idea and a single-minded determination.
“We’re also good at telling the end of the story. The story of ‘Brand Britain’ of big, well-known firms which people recognise and interact with every single day.
“Yet the ‘missing link’ is the most interesting part. It’s the part where entrepreneurs grow their great idea. Where they increase their profit, hire more people and expand beyond national borders.
“We found that seven in ten scale-ups are located outside of London – from tech companies in Cambridge, to manufacturers in the Midlands and Dundee’s gaming industry. Scale-ups have the potential to help rebalance our economy and bring recovery to every corner of the UK.”
Life in the Fast Lane also includes a roadmap for scale-ups to help them achieve their ambitions, including advice on securing the right talent and governance structures and how best to harness innovation.
The CBI is calling for the Government to throw its weight behind mid-sized firms to scale-up by:
- Reviewing the tax system to ensure it incentivises entrepreneurship and investment in medium-sized businesses
- Improving access to skilled workers that are essential for scale-up companies to grow by raising the Tier 2 (general) visa cap.
- Improve cash flow for innovative companies by shortening the timeframe for the payment of the R&D tax credit.
- Raise awareness of the benefits of the employee share ownership scheme for medium sized businesses.
- Push for standardisation of the European VAT threshold at €100,000.
António Horta-Osório (right), group chief executive of Lloyds Banking Group, said:
“Medium-sized businesses are playing a critical role in the UK economy, in creating jobs and growth, and we are determined to help their continued success.
“As part of our Helping Britain Prosper Plan, we’re supporting more businesses to start up and grow as well as helping more businesses to trade overseas through our UKTI partnership. This sector is the driving force behind the long-term strength of the UK and we support the CBI’s commitment to increase the number of businesses scaling up.”
Max Firth, managing director for Experian Business Information Services, UK&I, said:
“A relatively small number of scale-up businesses can make a significant contribution to economic growth, as our research shows. Finance providers and other forms of business support need to ensure today’s fast-growing MSBs receive the help they need to continue with their impressive progress.
“It’s also important to identify the next generation of MSBs ready to scale-up and understand what needs to be done to help them drive the economy forward in the same way.”