Policy suggestions directly from business leaders from across the country, from start-ups to large exporting multinationals and well-known high street brands, were announced Wednesday in The Growth Initiative, a series of government recommendations published by the British Private Equity and Venture Capital Association (BVCA).
Many organisations, including the government’s Plan for Growth, have tried their hand at restoring UK business growth. However, the UK’s fiscal position still needs repairing, and there are limitations as to what stimulus can be delivered without adding to the economy’s large debt burden.
The BVCA report is based on interviews with CEOs of UK businesses. BVCA chairman Robert Easton said: “There is little doubt that restoring growth is the greatest imperative facing governments and policymakers at home and across Europe today. The UK is in danger of slipping back into recession with Q4 2012 data suggesting the economy shrank again. Rather than simply concluding that the government needs to do more as many have done, the private equity and venture capital community have committed to making a positive and substantial contribution to the debate.
The policy recommendations that the Growth Initiative proposed can be broken down into four distinctive categories.
- Skills and training: UK youth unemployment is higher than every other OECD country apart from Spain and Greece. By tackling it, we address the needs of businesses by improving the skills of would-be recruits; and
- Visa reform: Hiring the right people is imperative for growth and productivity. The current context should be prioritised, alongside measures to “upgrade” our domestic labour force.
Tax and regulation
Government commitment to getting public finances under control should be applauded. The coalition should match rhetoric with concrete action on cutting regulation.
Banks aren’t lending to first time customers, especially SMEs, even with large growth potential. We should divert all the capital we can muster towards viable companies in this space.
A well-targeted industrial policy is needed to win the global race. The government must not use political frameworks in designing policy. Instead, it must select clusters to back those that have a key sectoral advantage and a geographic critical mass.
Although the BVCA supports deficit reduction as a means of restoring health and long-term competitiveness of the economy, it requires public spending cuts. This is something that the government has committed to, but for it to work, perhaps the most crucial factor, there needs to be growth.
Upon the report’s launch, Robert Easton hoped that the Growth Initiative will add real value to the debate and lead to meaningful policy change to help businesses invest more and grow faster, and so, create more jobs. After all, this is a goal that politicians, businessmen and all other stakeholders unanimously agree on.
The report was published at the BVCA’s annual chairman’s dinner on February 12th, with a lineup of guest speakers including Secretary of State for Work and Pensions, Iain Duncan Smith, and Sir Bob Geldoff.