Small companies are the government’s big agenda, says Vince Cable » SMEInsider

Small companies are the government’s big agenda, says Vince Cable

Government business policies are increasingly focussed on SMEs, with better access to finance and skilled workers high on the list, according to the business secretary.

Speaking to an audience of SME directors at an Evening Standard Business Connections event in Westminster this evening, Cable said that it is “not the intention” of the coalition to favour big business, and that groups that promote exporting and other UK business interests now adopt a “slant” towards smaller companies.

“If anything, the bias has gone the other way, because ‘big is bad’ has become the mantra,” he said.

Cable pointed to initiatives such as the British Business Bank and the Startup Loans fund, which aim to match up promising SMEs with funding, and said that the explosion of P2P lending platforms and challenger banks have helped to give the finance industry a much needed shakeup when it comes to SMEs. The launch of centres called “catapaults” around the country are also beginning to open up cutting edge science and technology to smaller companies, he said.

However, Cable accepts that there’s still a long way to go. Successive governments have failed to address the skills gap – something that the business secretary put down to a general lack of interest by politicians in any plan that can’t be safely bundled into a five year plan (“Ministers are constantly rotating, so they’ve always just arrived and they never understand the job”) and by taking such a hard line on immigration, the current government may have made things worse.

“We’ve got to be open to international talent,” said Cable, describing the immigration debate as “toxic”. A lack of interest or educational grounding in areas like coding, civil engineering and high-precision manufacturing means that the UK doesn’t have a big enough, skilled enough talent pool to feed the industry demand, but excessively strict student and working visas make it difficult for companies to recruit and retain non-residents.

Cable described a recent visit to McLaren, where he was told that the leader of one of the company’s top engineering teams would have to return to his native India in the middle of a high pressure project, in order to re-apply for a work visa for his current job. McLaren might just about be able to withstand such a disruption; a startup could be stopped in its tracks.

While Cable says that he believes in pushing educational institutions to provide more students, especially female students, with the skills they need to fill the gap, in the meantime the country will have to import its top talent. At the same time, Cable claims, politicians’ obsessions with universities as the only route to a career has led to a scenario in which blue-collar professions are systematically “disrespected” and pathways into work have been neglected.

As a result, he said, the UK lacks a coherent system of vocational training, such as those in Germany or Austria. The government has begun to address this by re-introducing apprenticeship schemes, but to date, these have only really served big business. Cable says he is keen to expand this to SMEs.

When it comes to unpaid work through internships, Cable is “conflicted”. While he feels that anything that helps young people get real, relevant work experience (especially when “some universities have been churning people out with totally unusable skills”), he is uncomfortable with the idea that companies can exploit the situation for free labour.

“My advice to any business that is thinking of offering internships is to pay the minimum wage and travel expenses,” he said.

SMEs are quickly rising up the agenda for all three leading parties. Last week, opposition leader Ed Miliband outlined Labour’s plans for the sector, pledging to cut business rates for small businesses and claiming that SMEs will be “first in line for tax cuts”.

“The jobs of tomorrow will come from a large number of small businesses, not simply a small number of large ones. Our plan recognises that,” he said.

  • I believe that there is not enough emphasis being placed on the over 40’s who have relevant life and business experience to enter into the market with their knowledge and business skills.

    It seems that the government only appear to be interested in skilled workers from other countries “which is understandable” and the younger generation “who obviously do lack in a lot of life skills to drive their businesses forward”.

    The finance side of things just seems to be a near on impossibility for the mature businessman or businesswoman and as a consequence of a bad credit history “perhaps due to no fault of their own” the ability to obtain sufficient finance to progress with viable business is left on the back burner with no foreseeable way forward.

    It would be encouraging to see the government formerly address this and many other issues for the mature entrepreneur in a way to help them too, to achieve success in their chosen field.

    There is far too much bureaucracy that surrounds capital investment for the more mature entrepreneur. When will the government finally take notice of what is a very serious and often discriminating problem?

  • Pete

    More lies? Under the new laws being pushed through the government can decide if your small business warrants staying open and if not can force you to close in order to get a ‘better job’. There is a huge raft of funding for those wanting to increase the size of the company with the ‘Growth accelerator program’ or add a bunch of apprentices, but nothing for those who just want to carry on doing what they love on their terms and at their rate. Save us the lies Mr Cable, until the election this will all be just vote garnering, then we all know that after the election it will be forgotten as has happened time and time again with other ‘promises’..

  • Phil

    SMEs high on government priority? While secretly trying to push through TTIP! Why does anyone believe these people?