Mr Major’s Speech Launching UK Conference on Small Firms – 18 September 1995

Below is the text of the 10 Downing Street press release covering Mr Major’s speech launching UK Conference on Small Firms, held on 18th September 1995.

10 DOWNING STREET:

The Prime Minister held a three hour seminar at No 10 Downing Street today to launch “Your Business Matters”, the UK conference programme on small firms.

With him was a group of 40 people, including senior members of his cabinet, representatives of the leading business organisations and of the clearing banks. The meeting discussed the issues facing small firms and the plans for the conference programme.

At the seminar the Prime Minister said:

“When you see a meeting involving the IoD, the CBI, the Chambers and TECs and the leading small business bodies, then you know the matter is important. And so it is. Small business growth is vital – for jobs, for exports and for prosperity. And when the initiative is sponsored by the banks, you also know it is viable – I am grateful to them for that.

This morning we are talking about the spirit of enterprise that is vital for our prosperity. Our objective is to renew the impetus for enterprise in Britain today.

These conferences will play a part in that. I see them as a catalyst, bringing the small business sector together in a constructive dialogue and prompting action from the government. It is the biggest, most concerted consultation exercise with small businesses that I can remember. And the point of it is to help small firms in the long term. We are not looking for snippets of policy over the next eighteen months, but policies for small firms going into the next century.

Small firms now employ over half the private sector labour force. They have created 2 million new jobs in the last 15 years. They will be the job creators in the future and their share of the economy will continue to grow. But they also have a broader value. Small firms embody the society of opportunity I want to see in Britain, where people can make better lives for themselves by their own efforts; where people take responsibility for themselves, for their families and for their employees.

So, I want to use this opportunity to set out the four basic elements of the government’s approach to fostering enterprise.

The greatest gift that government can give business is a stable economic environment. This is vital if businesses are to plan and invest for the future with confidence. I know that many firms suffered severely in the last recession. But now we are faced with the best economic prospects for a generation: low inflation and steady export-led growth. I want to be sure that we make the most of it.

The second component is to free-up markets. We have opened swathes of the economy by privatisation and sub-contracting. We have fought to bring down trade barriers for British exports. And we have secured the most flexible labour markets in Europe.

Deregulation is a central part of this. Trying to cut red tape is like wrestling with a greasy pig. The Deregulation Act has given us the tools for dealing with red tape more quickly than ever before. I hope these conferences will tell us where the regulations are really pinching.

The third part of the strategy is to lift the burden of government. The greatest barrier to enterprise is the weight of government itself. We have to rein in spending, cut the tax rates that kill incentives and simplify administration wherever possible: particularly PAYE/NICs and VAT. We have made some progress, taking nearly 100,000 firms out of VAT by raising the threshold. But there is more to do.

The last component is for the government to give practical assistance to small firms where it can, to help businesses help themselves. This is the thinking behind the network of TECs and Business Links. Our approach is to work with the private sector, in partnership, to deliver schemes in local areas. In total, the government must spend over £250m a year on schemes specifically for small firms. And that does not count programmes to assist businesses in general or revenue foregone by the lower rate of corporation tax for small firms. I hope these conferences will help us use this money to best effect.

These four elements of our strategy – a stable economy, free markets, reigning in the public sector and practical government assistance – are the essence of our approach to fostering the enterprise culture.

I would like to close by wishing all those involved in “Your Business Matters” every possible success in this initiative. You have the full backing of the government. We want to listen to the ideas of small business people and to see what can be done to give the spirit of enterprise a new momentum in the United Kingdom today. The government will consider the outcome of the conferences in drafting the next competitiveness white paper next year. We will not necessarily agree with all your ideas. But we will take action where we can.”