Festival of Business: Osborne to follow Germany’s lead on mid-market

Friday, September 16, 2011 | Posted by: Fiona Cullinan
Categories: Business advice | Tags: business, Grant Thornton, UK, George Osborne, Manchester, sponsor, conference, fob, mid-market, event, speech, Telegraph, Festival of Business, high-growth

Highlights for business from Chancellor George Osborne’s opening address at the Telegraph’s Festival of Business. Grant Thornton is a partner of the event and we’ll be posting more coverage shortly…

Following an opening address from Damian Reece, Head of Business for the Telegraph Media Group in which he promised a packed “constructive celebration of business”, the podium was given over to Chancellor of the Exchequer, George Osborne, for his keynote address, which focused on the recovery of the UK economy.

The Chancellor began by recognising the tricky position that medium-sized businesses were in – often overlooked by government by virtue of being neither very large nor very small – before highlighting the mid-market’s importance by labelling it as: “the real of engine of growth” and “working flat out for our economy”.

In a positively received speech, the Chancellor also identified the following:

• Eurozone crisis: The Eurozone must implement the 21 July agreement as soon as possible, while specifying how it intends to fulfil its promise to “take all necessary actions to ensure the resilience of banking systems and financial markets” made at last week’s G7 meeting.

• Red tape: The Government must assist businesses rather than hamper them with excessive red tape, with £3 billion of what the Chancellor deems “unnecessary regulation” scrapped, a step that’s also necessary in the rest of Europe if the content is to be seen as competitive on a global scale. (Read more in Mike Warburton’s post on The kindest tax cut.)

• Tax: The taxation of international profits will be made more competitive. Cutting business taxes “is essential to the competitive future of our country and a sign of our commitment to your companies”.

• UK Plc: The fact that the UK has re-entered the top 10 of the Global Competitive Index, indicates that the UK is improving as a competitive place to do business. It is the Government’s ambition to make the UK the best place to start and grow a business, already signified in its support for start-up companies in the form of 20-30% entrepreneur tax reliefs. (Read our post on Relief doubled for entrepreneurs – Budget 2011 update.)

• German-style mid-market support announced: Osborne announced a new scheme, inspired by Germany’s Mittelstand model, that will see Britain’s biggest businesses supporting the success of growing mid-size businesses through their supply chains. Tesco, Centrica, Virgin, GSK, Network Rail, GE, Carillion and BAE Systems have already committed to an endeavour that the Chancellor suggests should involve companies:

• Opening up new export opportunities, helping British businesses access new markets around the world where a big name is already established.
• Sharing expertise, with opportunities to work-shadow top executives, access training courses, and build apprenticeship opportunities.
• Creating new intellectual property by sharing R&D facilities and collaborating on new technology.
• Building more sustainable models of financing and payment arrangements that help access to working capital.

More will be announced on the scheme in the autumn.

Jeegar Kakkad, Senior Economist at EEF, an organisation which represents UK manufacturers, was among the first to respond to the Chancellor’s speech:

“The Chancellor rightly identifies the growth potential of mid-size firms. But while it’s sensible to get our world-class larger businesses to support the development of these companies, the Government still needs to go further to tackle some of the biggest barriers to their success, such as access to finance, rising energy costs and regulation.”

At a proceeding panel, John Armitt CBE, Chairman of the Olympic Delivery Authority, supported George Osborne’s supply chain initiative, saying:

“Maintaining reliable supply reduces the risk – all business are about personal relationships. These things only get done by teams in a trusting environment.”

On government’s relationship with business, Armitt reinforced the Chancellor’s underlying message of stability before discussing the idea of “long-term objective setting”:

“The Government’s job is to work out the priorities, which business then take the lead from – meeting the challenges set out by government objectives.”

You can read the Chancellor’s full speech here and also visit the Telegraph’s Festival of Business website.

Words: James Hickie. Image (cc): Altogetherfool/Flickr

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* Read more Festival of Business posts
* Festival of Business 2011 in tweets
* Why is Grant Thornton sponsoring the Telegraph’s Festival of Business