Prime Minister Andy Burnham has called for a “culture shift” in the relationship between government and business, as he brought entrepreneurs, business leaders and regional mayors together at Downing Street to discuss how to drive economic growth.
The meeting formed part of the government’s wider growth agenda, which is focused on investment, entrepreneurship, regional development and reducing barriers to business expansion.
Burnham argued that Britain had the ingredients needed to succeed but that businesses faced too many obstacles to growth. He said the government needed to become a “partner for growth”, with a greater focus on creating the conditions for businesses to invest, expand and create jobs.
The Prime Minister also linked the issue to his plans to give greater economic powers to regional leaders. He argued that Britain had become too centralised, leaving regions without enough control over the decisions affecting their economies.
In a statement to the House of Commons earlier this month, Burnham said decades of centralisation, deindustrialisation and austerity had weakened regional economies. He said his government would pursue a “major redistribution of power”, giving regions greater control over investment and economic development while using central government to coordinate growth.
Infrastructure was one of the practical barriers highlighted by Burnham, with delays to electricity grid connections and high energy costs identified as obstacles to businesses looking to invest. The government also proposed giving mayors greater influence over skills, infrastructure and local economic strategies, bringing businesses, universities and local government together to support regional growth.
Startups and scaleups were another focus of the government’s approach. Burnham said Britain needed to retain more of the value created by its businesses as they grew, an issue that has become particularly prominent in the technology sector as successful UK startups have increasingly looked overseas for investment and expansion.
The government’s approach has also faced pressure from small businesses over the costs of operating in Britain. More than 800 hospitality businesses and prominent chefs recently called for a reduction in VAT, arguing that the current rate was putting pressure on employment, investment and the survival of independent businesses. The government had already reduced business rates for pubs and live music venues, but hospitality businesses continued to call for further support.
For small businesses, the government’s “pro-business” approach covered a wide range of issues, from access to finance and energy costs to taxation, planning, infrastructure and skills. The meeting brought these into a wider discussion about whether government policy could create better conditions for businesses to invest and grow.
The greater role proposed for regional government also represented a significant change in how economic development would be managed. Mayors and local leaders were set to have more influence over infrastructure, skills and investment, while businesses were expected to play a larger role in shaping local economic strategies.
Burnham’s meeting combined the government’s broader ambitions with some of the practical concerns facing business owners. The measures discussed were intended to support investment and growth, while the response from SMEs would provide an important indication of whether the government’s plans addressed the costs and barriers businesses were facing.
