Treasury’s Chief Secretary on why ‘scale ups’ are the rising stars of UK productivity
In this guest blog, Chief Secretary to the Treasury Elizabeth Truss talks scale ups – why she thinks they’re key to UK plc and how the government is working with them.
As Chief Secretary to the Treasury, I need to know we are doing everything possible to make the UK one of the best places in the world to start and grow a business.
It’s already quick to set up a business here — just 4.5 days on average — less than half the time it takes in Germany.
We’ve supported businesses to grow by cutting corporation tax from 28% to 17% by 2020 and are investing a record £23 billion in infrastructure so businesses have the right environment to thrive. Since 2010 there are over 1 million more businesses and the private sector has created more 3.3 million more jobs.
The Treasury does lots of work on the big picture for the UK economy. But there is no substitute for talking directly to entrepreneurs and businesses.
Today, I met a group of innovative and fast-growing businesses from across the country who were not afraid to share their ideas.
I learnt quickly how competitive our entrepreneurs can be — as a Norfolk MP with a the excellent English Whisky Company in my constituency I was firmly told the best English whisky is made in the Lakes by The Lakes Distillery. I stuck up for my local whisky obviously.
So what else did I learn?
Scale-up businesses are defined as growing by an average of 20% a year.
The attendees today told me they are also twice as productive as other businesses.
A priority of mine is understanding more about how we measure public sector productivity so we can improve more lives by delivering world-class public services, and ensure maximum value for the taxpayers’ pound. There were great examples today from how these young, fast-moving companies operate so efficiently.
The pride with which these entrepreneurs talk about their business is infectious. One told me that they felt fulfilment would be local people feeling they are part of the success story.
As we leave the EU and forge an ambitious new role for Britain in the world, we want to ensure scale-ups become international successes helping to drive our economic growth.
The Treasury is already looking at where ambitious, innovative entrepreneurs can obtain the long-term finance they need to grow. The next step in this ‘Patient Capital Review’ is a public consultation before the end of July — so tell us what barriers are preventing your growing, innovative firms from scaling up.
My colleague, Minister for Small Business Margot James, is also leading a Scale-Up Taskforce.
And we have asked Professor Tim Dafforn to lead an Entrepreneurship Review to look into what prevents businesses from taking action to grow and why those that do are not always achieving their full potential.
The entrepreneurial journey is tough but hugely rewarding and we all benefit when British start-ups turn into scale-ups, which then become international successes.
I’ll continue to do all I can to ensure government is behind those who choose to take the risk and set up their own business.