Written statement: Backing your Business: Our plan for small and medium sized businesses - Sep 16

PUS, Department of Business and Trade (Blair McDougall): On 31^st July, the Government launched our Plan for Small Businesses, changing the status quo in order to support small businesses.

Economic growth remains the Government's foremost priority. The UK's 5.5 million small and medium-sized enterprises (SMEs) are the backbone of our economy and the driving force behind growth in every community. SMEs are vital to the UK economy, making up 99.8% of all businesses, employing 60% of the private sector workforce, and generating £2.8 trillion in turnover. This underscores the importance of our commitment to supporting small businesses and ensuring they thrive.

While the UK is home to many outstanding businesses across sectors such as life sciences and the creative industries, too many SMEs have faced barriers to growth. Businesses seeking to grow report challenges ranging from access to finance and regulatory burdens to declining high streets.

Developed hand-in-hand with small businesses across the UK, Backing Your Business is our long-term strategy to break down barriers and unleash SME growth and productivity. This plan aims to transform the environment for starting and running a business, while placing SME growth at the heart of our growth mission

Key actions include:

1. Opening Up Opportunities

• Launching a new Business Growth Service(opens in a new tab) to streamline access to advice and support, aligned with our vision for a modern digital government.
• Supporting under-represented entrepreneurs through improved data collection and initiatives such as the Lilac Review for disabled business owners.
• Enhancing SME understanding of export opportunities by integrating export advice into the Business Growth Service and expanding UK Export Finance by £20 billion to £80 billion, including a new Small Export Builder insurance product.
• Making it easier for SMEs to win government contracts through a new procurement policy, an SME Procurement Education Programme, and a Defence SME Support Centre.
• Supporting innovation through improved guidance on intellectual property and security, with resources from the Intellectual Property Office and Innovate UK.

2. Fixing the Fundamentals

• Introducing landmark legislation to tackle late payments, which cost the UK economy £11 billion annually and close 38 businesses each day. This will be the most significant legislation to tackle late payments in over 25 years and will establish the strongest legal framework on late payments in the G7.
• Cutting the administrative cost of regulation by 25%, freeing up time and resources for businesses.
• Modernising the tax and customs system, including AI-powered tools and personalised digital services, as outlined in HMRC's Transformation Roadmap.
• Accelerating planning processes to address infrastructure gaps and support smaller housebuilders.
• Helping businesses reduce energy costs and transition to net zero, with targeted advice and expanded training in retrofit and energy efficiency.

3. Unlocking Access to Finance

• Expanding Start-Up Loans to support 69,000 new businesses with finance and mentoring.
• Committing to the British Business Bank's Growth Guarantee Scheme and increasing the ENABLE Guarantee programme capacity from £3 billion to £5 billion.
• Providing £340 million to boost early-stage equity finance for innovative firms.
• Working with lenders to ensure fair use of Personal Guarantees, including a mandatory Code of Conduct under the Growth Guarantee Scheme.

4. Backing the Everyday Economy

• Introducing a new framework for local authorities and Hospitality and Night-time Economy Zones, following the Licensing Taskforce.
• Supporting high street businesses through Growth Incubators, redevelopment of commercial space, and targeted investment.
• Providing funding to up to 350 communities to support local regeneration.
• Reforming business rates by introducing permanently lower multipliers for retail, hospitality, and leisure properties with rateable values under £500,000 from April 2026.
• Banning Upward Only Rent Review clauses in commercial leases and continuing to promote High Street Rental Auctions and a new Community Right to Buy.
• Supporting the growth of co-operatives and mutuals, including a call for evidence on how best to enable their expansion.
• Enhancing community safety with 13,000 additional police officers, the Safer Streets initiative, and measures to tackle shoplifting and tool theft.

5. Future-Proofing Business Skills

• Promoting digital adoption through pilot schemes, industry partnerships, and expansion of the Made Smarter programme.
• Supporting leadership development and mentoring through an industry-led Business Mentoring Council.
• Encouraging youth enterprise through education, competitions, and a new Youth Entrepreneur category in the King's Awards for Enterprise.
• Ensuring SMEs benefit from the skills and apprenticeships system, including £1.2 billion of additional annual investment by 2028–29, and promoting access to T-Levels and apprenticeships via the Business Growth Service.

These measures are just the beginning. With over 200 actions, Backing Your Business will empower SMEs to grow, innovate and thrive in every corner of the UK. We are committed to delivering these actions over this parliament and will publish a delivery update in 2027. We launched this strategy in partnership with small businesses – and we will continue to work side-by-side with them to deliver real change.

One of the commitments in “Backing your Business” is to increase the contingent liability for the ENABLE Guarantee scheme administered by the British Business Bank to £5 billion. ENABLE Guarantees are designed to encourage additional lending to smaller and medium-sized businesses. Participating institutions are incentivised by a Government-backed guarantee to support defined portfolios of debt finance in return for a fee.