The unfair divide in small business support
Following political conference season, Jason Stockwood argues government needs to rethink the ‘London-centric’, FinTech-focused approach to British business
We are constantly hearing about the north-south divide. There has long been a sense that the recovery has been confined to London, with many parts of the UK yet to see any concrete benefits from the country’s much-vaunted growth.
Of course, this doesn’t tell the whole story. Recent figures from Barclays suggest that, while businesses in London recorded growth of 10% during the first quarter of the year, the North West was close behind at 9%.
Regional firms are quickly catching up with those in the capital, even though many businesses outside London are concerned that the government’s efforts are still being too closely concentrated within the M25.
Regional growth in spite of support, not because of
Indeed, the growth of those firms outside the capital is even more remarkable when it’s considered in the context of an ongoing concentration of political will within London.
For successive Parliaments, governments have fallen in love with a handful of ‘sexy’ sectors, pushing their success over all. This has created an uneven playing field in which businesses in London are prioritised above all others. This has to change.
The Party Conference season is over, during which politicians lined up to persuade businesses that they are the right people to guide the economy back to sustainable growth. But despite their insistence that they are on the side of small businesses, for too long their efforts have been unfairly concentrated on London.
This is bad for everyone. It creates an uncompetitive climate, it is unfair on businesses outside the capital, and, perhaps above all else, it highlights the lack of thought that politicians give to the rest of the country.
We saw the potential impact of this in the very close result of the Scottish referendum. That vote signalled much of Scotland’s dismay at being ignored by Westminster.
Now, calls for further devolution for other areas across the UK are further evidence of the political class’s forgetfulness when it comes to regions other than the South East. Westminster has ignored the country beyond London for too long, and now this problem is coming home to roost.
An unfair focus on FinTech
But it’s not all of London that’s got an unfair piece of the pie. In fact, the site of the coalition’s efforts can be located even more specifically than that. The government has long been enamoured with the financial technology, or FinTech sector.
Nowhere is this more apparent than in the London postcode of EC1 – the so-called Silicon Roundabout. Some 15,620 new firms were started in this postcode alone during 2013/14, and it has enjoyed great support, including the high-profile Tech City project – but FinTech will never deliver a jobs-based recovery.
Simply Business is a FinTech company. We are happy to be based near Silicon Roundabout, and we feel that the area has a lot to offer. However, this should not be accomplished at the cost of other businesses. My background is in the North, and I know very well that businesses there and elsewhere have the potential to succeed just as much as those in London. The government needs to recognise that firms in every part of the UK, and in every sector, have the potential to deliver the sustainable growth that the country so desperately needs. By concentrating on a small London enclave while ignoring so many other areas, the coalition has put all of its eggs in one basket – a headline-friendly basket, but one that does not offer a representative picture of the UK’s small businesses.
As Conference season ends, politicians of all stripes need to rethink their approach to British business. The strength of growth amongst businesses outside London is a clear demonstration that these agile, exciting firms are stepping up to meet the challenges that they face, and that they are emerging from those challenges even stronger. Conversely, business support remains bottom-heavy, concentrating too closely on one corner of the capital. We need new thinking to ensure that businesses across the country get a level playing field on which to fulfil their very real potential.
Jason Stockwood is the CEO of Simply Business, headline sponsor of Startups Awards.