Nigel Adams is the MP for Selby and Ainsty
We have heard much about jobs growth in this last election year – 1,000 a day over the last parliament – but less about where they have come from.
New research released shows that a third of last year’s jobs growth came from just one per cent of UK companies. A special breed of high-growth smaller businesses created jobs for an average of 4,500 people each week last year.
To put that into perspective, this tiny number of companies generated three times as many new jobs as the whole of the FTSE 100 put together. These fastest growing small companies are the businesses that have the potential to transform our economy.
Before becoming an MP I set up successful telecommunications companies headquartered in Yorkshire. These businesses aren’t Silicon Valley exports based in London’s Tech City – three out of every five of these high-growth small businesses are based outside London and the South East. Supporting small businesses is hugely important to me and the Conservative Party must get behind this regional job creation engine.
If northern towns and cities are to reach their full potential, we need more of these high-growth companies. I was pleased to help Octopus Investments launch its High Growth Small Business Report which looks at these extraordinary companies and asks how we can create more of them. The research, which was carried out by the Centre for Economics and Business Research (Cebr) shows that with ten per cent more of these businesses next year the North of England could see 7,800 extra jobs.
Beyond my beloved Yorkshire, the report makes clear that there is potential for HGSBs to drive growth across the entire country. It calls on the Government to target a twenty-five per cent increase in the number of high-growth small businesses across every region over the next five years. This would create approximately 170,000 new jobs and around £22.5 billion in additional turnover.
Achieving this will not be easy, but the report makes some excellent policy suggestions for how this could be achieved. Today, I call on the Government to look at these recommendations. Local Enterprise Partnerships (LEPs), for example, are Government-backed local initiatives that are already proving extremely successful. LEPs could be expanded and developed in order to ensure that HGSBs get the support they need wherever they are. LEPs need to be a one-stop-shop for businesses.
We might also consider allowing businesses that meet tightly-defined criteria to defer payment of corporation tax, giving them space to grow but making sure they pay their fair share. Too many entrepreneurial companies don’t get the support they need to grow because they don’t know about existing access to finance schemes. We need to make sure our tax system provides the right incentives, but we also need to raise awareness of Government initiatives that already exist.
The report also makes clear that the Government must recognise the make-up of these dynamic high growth small businesses – and foster their growth by meeting their needs. For example, the report shows that sixty-five percent of the country’s HGSBs are based in the services sector. This is a sector for which access to high speed broadband and mobile broadband is essential, but the report found that businesses across some of Britain’s biggest cities say that poor access to high speed broadband is a major obstacle to growth. The report calls on the Government to solve the missing links in infrastructure in order to create a better connected economy.
Under a Conservative Government, we’ve cut corporation tax and created a stable economic environment. We’ve chipped away at Labour’s edifice of pointless regulations and given businesses the confidence to invest across the country. And it’s working. Businesses are confident about the future, and their employment growth shows that high-growth small businesses are more confident than any others.
We can’t be complacent. When I talk to small business owners in my constituency, they talk about access to funding, finding workers with the right skills, and making sure that we have the infrastructure in Selby and Ainsty and elsewhere in the region to link us to the rest of the North West and the UK. This report shows that businesses all over the country have the same concerns.
As an MP I can help to point people in the right direction if they’re looking for funding, or apprenticeship opportunities, but fixing these issues and getting the right infrastructure requires concerted action from Government. Those are three clear priorities for the Treasury and BIS. I’ll be working hard to put those on the agenda, and I hope that Conservatives support my campaign.