Industrial strategy is too London centric, say UK SMEs

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Over half of UK SMEs believe that government investment is unevenly spread in favour of London, according to new research.

The findings suggest UK SMEs expect more from the government’s industrial strategy beyond London, as awareness of the Northern Powerhouse grew by 13% to over two thirds (70%) of SMEs. However, there remains work to be done to champion the Midlands Engine, where over half (54%) of SMEs are unaware of the initiative, despite renewed efforts by the government to champion the region.

The survey carried out by Bibby Financial Services on its latest SME Confidence Tracker highlighted that over a third of SMEs (36%) believe the Northern Powerhouse is too focused on Manchester and should look to develop other cities in the North, down from 40% in 2017. A similar situation exists in the Midlands, where nearly a third (28%) of SMEs believe the Midlands Engine is too focused on Birmingham and should be focusing on developing other cities in the region, down from 33% in 2017.

When asked what they thought about the Northern Powerhouse, nearly a third (29%) of SMEs see it as an investment gimmick that is politically motivated. Just under a quarter (24%) believe the same of the Midlands Engine.

Edward Winterton, UK CEO, Bibby Financial Services, said: “After decades of under-investment in the UK regions, a patchwork approach to investment is not delivering on the government’s promise of a fairer economy. SMEs need better support to re-set the balance between the regions and provide business owners with the confidence to invest and grow.

“SMEs are doing their upmost to get on with things amidst Brexit uncertainty. It is about time the government did the same. Brexit must stop being a distraction from a domestic agenda that needs to deliver for businesses and the people they employ. For starters, roads need to be built, internet speeds improved, and train lines electrified.

“At the start of the year we saw a Brexit-bounce in confidence as SMEs saw signs of progress and tangible outcomes from the negotiations. Since then, developments on the Brexit front seem to be as dry as the UK’s weather. Lack of movement and squabbling within government means that SME confidence will continue to waiver.”