Cameron pledges £1bn for new ‘help to grow scheme’
Small business initiative intends to create British version of Germany’s backbone of mid-sized firms – Mittelstand – should Conservatives come into power
Prime minister David Cameron has pledged £1bn in funding for a new ‘help to grow’ scheme to help small and mid-sized businesses.
The scheme aims to create a British version of Germany’s Mittelstand, a column of supporting mid-sized firms across the country. Similarly to Britain, Germany’s small and medium sized enterprises contribute an estimated 50% of its GDP, employ around 70% of the country’s workforce and have been struggling with credit availability.
The initiative will cover the “valley of death” funding gap, and aims to support around 500 fast growing firms by guaranteeing loans made by private lenders or co-investing public money alongside private money. An estimated £100m of new lending is to be made available via the British Business Bank pilot scheme.
Cameron announced the plan at the British Chambers of Commerce annual conference but, in a bid to win the vote of the UK’s small business owners, said its launch is dependent on whether the Conservatives are voted into power on May 7.
Speaking to business leaders at the conference, Cameron said: “Here in the UK, 45% of the job growth has come from our fastest growing medium-sized businesses. Their businesses, your business, are the country’s job engine. But they often struggle to get the finance they need to grow.
“We need to think strategically about helping those small firms over the ‘valley of death’ funding gap so they can become medium firms, and the medium firms can become larger firms,” he told delegates,”
In a further bid to highlight his party’s contribution he added: “You asked for cuts to regulation – we have delivered. We are the first government in 40 years to have less regulation than when we started.
“Domestic regulation has been cut by £10bn over the past four years and, as we announced last weekend, we have a target for the next parliament – cutting another £10bn from your bills. That is a ‘deregulation dividend’ of £2,000 per business.”