John Cridland, director-general of the CBI

Member Article

CBI boss calls for more Government support for medium-sized firms

Medium-sized businesses (MSBs) need greater support from the Government and business to really become successful, the head of the CBI has said.

John Cridland, CBI director-general, highlighted the need to widen the supply of finance, step up support for exporters and ensure that skills challenges are tackled in order for MSBs’ huge potential to be fully realised.

In a speech to the CBI’s inaugural MSB Summit in London, he called for:

  • The establishment of a private placement market for MSBs to issue debt to institutional investors, following the French example, which has grown to a market worth £4bn with over 50 transactions a year
  • Bolstering the late-stage venture capital market with new players, such as the Business Growth Fund and large corporate investors
  • Reform of capital gains tax to incentivise long-term equity investments in MSBs and promote a culture of equity finance in the UK.

The CBI also published new research by Millward Brown, the global research agency, on the outlook for MSBs.

With over half of the 200 firms surveyed (51%) having grown by at least 10% a year over the last three years, the vast majority (82%) were confident the next five years would bring further growth. Separately, 86% are looking to develop a long-term strategy for expansion.

John Cridland, CBI director-general, said: “Our forgotten army of MSBs contribute a huge amount to our economy. Despite making up less than 2% of all British companies, they generate almost a quarter of private sector GDP, and employ one in every six people.

“MSBs have come out of the downturn leaner, fitter and ready to kick on. Up and down the country, they are brimming with confidence, and many are growing quickly.

“Unlocking their potential to grow is vital to our future prosperity. With the right support from government and other businesses, they can be the engine of our economy into the next five years and beyond.”

António Horta Osório, CEO of Lloyds Banking Group, said: “Medium sized businesses are playing a critical role in the UK’s economic recovery, creating jobs and growth across all regions of the UK. That’s why, along with the CBI, we are supporting the first ever MSB summit so that we can help the sector reach its potential.

“As the UK’s leading retail and commercial bank, we’re determined to be the bank doing more to help medium sized businesses.

“We’ve already gown our net lending to this sector by over 8% this year and have ambitious plans for 2015 to help this vital segment of the UK economy, from developing our expertise in manufacturing to helping companies grow into overseas markets.”

This was posted in Bdaily's Members' News section by Clare Burnett .

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