From the top · 4 October 2016

Philip Hammond vows to support UK enterprise

Philip Hammond is the new chancellor
Chancellor Philip Hammond announced fresh policies for UK enterprise in his conference speech

Speaking at this year’s Conservative Party conference in Birmingham the chancellor, Philip Hammond, has announced a raft of new policies to support enterprise in Britain.

In his speech on 3 October, Hammond spoke at length about tackling the UK’s “grossly uneven” productivity levels, revealing plans to provide infrastructure investment across the whole country.

New funding measures for tech businesses and support for smaller building firms were put at the centre of the government’s new industrial strategy.

“Quite simply, we’re not building enough new homes.”

As expected, the chancellor used his speech to pledge £3bn in support of a Home Builders’ Fund, designed to address the housing shortage in Britain by providing small building firms across the country with the finance required to start projects.

The fund follows recent research by the Federation of Master Builders (FMB) which found that 50 per cent of SME building companies across the UK struggled to access finance to begin new housing projects, with owners feeling like the planning system was a closed-shop for small firms.

The new fund will seek to push smaller house builders to the fore and help the government reach the targeted figure of new homes.

“Part of Britain’s productivity transformation will come, of course, from innovation.”

In another key announcement, Hammond introduced a £220m fund to support innovative UK tech firms, seeking to secure the UK’s future as a major global tech tech following uncertainty related to the EU referendum.

A £120m portion of the fund will be siphoned off to “nurture the tech transfer offices that put universities and entrepreneurs together”, the chancellor said.

The government will hope that renewed support for innovation and enterprise in the tech industry will go some way to dispel worries over the potential loss of EU-funded research opportunities for entrepreneurs, as well as the end of the free movement of tech workers across European borders.

“We want to create the conditions for success in the North, the South, and everywhere in between.”

In his speech, Hammond also threw his weight behind the Northern Powerhouse and Midlands Engine initiatives, guaranteeing “regional devolution deals”.

Hammond stated that closing the UK’s productivity gap was “key to Britain’s future outside the EU”, and spoke of the government’s commitment to providing political leadership to the Northern Powerhouse and Midlands Engine.

He noted that, although Birmingham had seen an increase of 320,000 workers since 2010, productivity and economic growth in the Midlands had lagged behind the UK average.

Commenting on the chancellor’s announcements, Mike Cherry, national chairman of the Federation of Small Businesses (FSB), welcomed the measures to introduce regional strategies, but pushed the government to go further in infrastructure and skills investment.

“Small businesses within the Northern Powerhouse and the Midlands Engine will be pleased by confirmation that the chancellor will provide the political leadership for these projects.

“Over 40 per cent of our members want to see greater local control over spending, but also investment in digital infrastructure, inter-city transport and workplace skills,” added Cherry.

In response to the conference speech, policy development manager at the Association of Independent Professionals and the Self Employed (IPSE), Jordan Marshall, welcomed the commitment to a regional-based productivity strategy.

“The IPSE welcomes the chancellor’s recommitment to the Northern Powerhouse agenda. Increased investment and better infrastructure links in northern cities will make the region a more attractive place to do business, and should help achieve the government’s aim of an economy that works.”

Marshall continued to praise the role of Britain’s self-employed workers in driving productivity and economic growth in the country.

“The self-employed will be absolutely fundamental to the UK improving its productivity as called for by the chancellor. Independent professionals help businesses innovate and adapt to new challenges,” he said in a statement.

Hammond’s emphasis on raising UK productivity comes as the Office for National Statistics (ONS)  is expected to shine a negative light on productivity levels this week.

In its latest International Comparison of Productivity study, the ONS will compare all G7 member states, with Britain expected to perform poorly. In 2014, for example, the nation’s productivity score was found to be 18 points below the global average for major advanced economies.

Which seven cities are looking to lure tech entrepreneurs away from London’s hub? Find out here. 

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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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