Yet another example of this Government’s outrageous stifling of innovation
Just this week I was contacted by a constituent who has set up a successful and viable small enterprise, working hard to achieve this over the past five years.
Despite this innovation and the potential growth such an enterprise could deliver, finding the capital needed to invest has proved virtually impossible due to the barriers and complete disregard the Tory-led Government has shown towards small and medium sized enterprises (SMEs).
Sadly this is yet another example of this Government’s outrageous stifling of innovation. Time and time again we hear the Tory-led Government claim that they are on the side of small businesses, yet they are failing to offer any real help to SMEs or those with new start up businesses. The case of my constituent is just one of far too many examples of this Government’s complete failure to address the crisis of lending and the barriers to funding facing SMEs.
Increased lending to SMEs, both via the banks but also through alternative government-led bodies is absolutely vital if we are to see much-needed growth in the UK economy at such a critical time.
Remarkably there are 74,270 employers in West Yorkshire defined as SMEs, meaning that SMEs account for 99% of all employers in the West Yorkshire region.
Despite this, and despite the many, many more wanting to set up new SMEs and innovative small organisations, the Government is still failing to act after over two years in power, and failing hundreds of thousands of entrepreneurs; the lifeblood of our economy.
Perhaps most worryingly, overall lending to SMEs fell again last year, despite the Government’s rhetoric and repeated attempts to convince small businesses that it is on their side. According to the Bank of England Trends in Lending data, net lending to businesses has fallen in nine out of the last twelve months and has fallen by more than £10 billion in the past year.
On top of this, credit easing is yet to help a single business, despite presented as the flagship growth announcement from Conservative Party Conference and the Autumn Statement. The failure of Project Merlin
Indeed the Tory-led Government’s flagship scheme specifically to help SMEs, the Export Enterprise Finance Guarantee Scheme, has helped just 5 businesses since its launch last Spring. This figure is an absolutely dismal one even without the additional revelation that the number of firms helped by this scheme has actually fallen since January.
All this comes before the crisis developing as a result of the prohibitively high interest rates on offer. I have heard several examples from some of my constituents exposing APR rates of over 23% being quoted. Since this has come to my attention, I have tabled several questions to the Department of Business, Innovation and Skills and am awaiting a response from the Secretary of State, Vince Cable MP.
I have asked Mr Cable;
What is the rate of interest offered on loans to SMEs and start up businesses by publicly funded organisations sponsored by his Department and;
How his Department a) monitors and b) regulates the support from publicly funded organisations, such as the Business Enterprise Fund, for start up businesses in i) Hemsworth constituency and ii) England
The Tory-led Government has shown complete disregard for SMEs and a damaging failure to prioritise and support and already vital part of our economy of growing importance. Their policies are seriously harming the small business community and preventing new start up businesses from developing at precisely the time when the country and the UK economy needs the innovation and growth that such enterprises can deliver.
I have also written directly to Mr Cable to raise my concerns and the specific concerns of my constituent in full with the Government.