Thursday, October 17, 2019
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Umunna vows to boost local funds for SMEs

London: Chuka Umunna, Labour’s business spokesman, has vowed to decentralise more business support to local areas after a visit to Washington this week to draw lessons from the way the US helps small companies.

Labour believes that passing money down from Whitehall to the regions is the best way to get better value from government budgets that face a prolonged squeeze, whichever party wins the 2015 election.

Earlier this month Ed Miliband promised the “biggest devolution of power to England’s great towns and cities in a hundred years”, as Labour attempts to spread wealth away from London.

But Labour is so far struggling to identify pots of money to pass down to local groups — led by businesses, town halls, universities and Local Enterprise Partnerships — to turn the rhetoric into reality.

Umunna has been talking to the US Small Business Administration to get some ideas and has proposed giving more local control over the government’s so-called Growth Accelerator scheme, which aims to help small companies grow.

The scheme was set up in 2012 by Vince Cable, business secretary, who said in its first annual report that 3,400 businesses were increasing turnover more quickly after using the service, which is being led by Grant Thornton and other private sector experts.

However, the sums involved are relatively small — the scheme costs £200 million (Dh734 million) over three years. Miliband has promised to raise the amount of Whitehall money allocated locally every year from £2 billion to at least £4 billion.

“In the US they don’t have such an imbalanced economy because they have business support at a local, city and state level,” Umunna said. “We can learn from the success of small business development centres in the US.”