Lifeblood of the economy

FOR all the fashionable talk of the evils of capitalism, the British economy is never going to struggle back towards growth unless the bedrock of capitalism – the small business – is allowed to grow and prosper. It was encouraging, therefore, that the Prime Minister came to the region to emphasise this very point.

The type of backing that David Cameron announced yesterday is welcome indeed. Making unused Government office space available to small firms, increasing the amount of loan guarantees available and easing access to advice and support can only be a boost to small businesses and those firms that are just starting up. But, at the same time, it can only go so far.

In the end, there is only so much empty office space available and, indeed, only so much that the Government can do. In fact, in terms of giving budding entrepreneurs a leg up, it is all too often a case not of what the Government can do but of what it can stop doing.

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The problem with office space, for example, is not merely finding it, but also affording it. Encouraging local authorities to show more flexibility over business rates is one of a host of ways in which the Government could make life easier for small firms by cutting back the red tape that can choke their finances.

Then there is the lack of willingness for banks to back new business projects, a problem that the Government has failed to solve in spite of repeated attempts.

Mr Cameron has correctly identified small businesses as the lifeblood of the economy. There are still far too many blockages in Britain’s economic arteries, however, which must be removed for that blood to flow.