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Who will protect the future of Britain’s small businesses and why? Leading angel investor on why he’s backing the Conservatives

Since the EU referendum result on 24 June last year, businesses have increasingly come to terms with Brexit, taking decisive action to seize current and future opportunities.

Critical to this rising confidence has been Theresa May’s commitment to build upon the most global and ambitious elements of the Leave campaign’s platform.

By championing an outward-looking, pro-business agenda, the Conservative Government has successfully allayed many of the private sector’s Brexit-related concerns, introducing a series of policies in an effort to make Britain more globally competitive.

Theresa May has established the Conservatives as pro-business, argues Luke Davis

As May assembled her cabinet after winning the Conservative leadership ballot in August 2016, the new Prime Minister took the pivotal decision to establish Britain’s first dedicated Department for International Trade, led by Liam Fox.

This new department was tasked with laying the foundations of Britain’s post-Brexit free-trade agreements.

Positively, the new trade department has not merely committed itself to this enterprising agenda; it has also begun to develop targeted measures to prepare businesses nationwide for international opportunities across established and emerging markets.

Luke Davis is chief executive of enterprise investment scheme IW Capital

The CEBR’s Thinking Global report found that less than one fifth of UK SMEs currently export compared with over 40 per cent of large businesses, leaving a £141.3billion export shortfall in the UK economy.

As such, one of the most encouraging initiatives so far has been the launch of the new online trade portal to connect SMEs with potential partners overseas. In the effort to open new markets for British businesses, initiatives such as this will be of critical importance in the years ahead.

The Government has also taken ambitious steps to support SMEs through public procurement spending. By committing one third of all Whitehall spending to small and medium-sized enterprises by 2020, the Government is working to support nationwide entrepreneurship and scale-up growth by matching supportive sentiments with targeted actions.

So far this measure has been unmatched by the Labour Party, whose small business agenda has largely been defined by the single issue of late payments.

Addressing one of the most pressing issues facing growing small businesses, the Government launched the Patient Capital Review into the financial barriers preventing these firms from growing into more established scaling companies.

Whilst the UK ranks third in the OECD for the number of new businesses that we create, we lag behind in thirteenth place for the number that grow into larger businesses.

If this problem is not tackled with robust policy-backed initiatives, the Scale Up Institute estimates that the UK economy will miss out on £225billion worth of activity and 238,000 extra jobs over the next two decades.

The Labour Party’s industrial strategy focuses largely on public investment and offers only a vague commitment to SME lending

At this critical juncture, the full potential of these businesses must be realised.

Critically, these proposals for small business growth are only in their infancy stages and must not be put at risk as a consequence of this election.

In its Industrial Strategy, the Government took the first steps towards building a long-term, nationwide scale-up infrastructure by appointing the country’s first scale-up champion and beginning an industry consultation to support SME growth through solutions including the proliferation of crowdfunding across Britain.

It has also launched the Bank Referral Scheme – an initiative which expands awareness of alternative finance by encouraging larger banks to direct entrepreneurs to alternative finance providers.

Equity crowdfunding, peer-to-peer lending and other forms of alternative finance have enabled the start-ups to flourish, particularly across London and the South East; however, elsewhere in Britain, these forms of finance are often too distant.

Having demonstrated its desire to address the growth funding gap, the nation’s entrepreneurs and their investors will have high expectations for the Conservative Government to follow through on its plans to build an expanded funding infrastructure for small businesses.

By contrast, the Labour Party’s industrial strategy focuses largely on public investment and offers only a vague commitment to SME lending as part of its proposal for a National Investment Bank.

Whilst there’s certainly more work to be done, since November Theresa May’s Conservative Government has embraced a bold agenda for private sector growth, essential to Britain’s global agenda for Brexit.

Evidence shows that investor sentiment toward SMEs is positive, with more than a quarter of UK investors expecting that the nation’s entrepreneurs will lead growth through the Brexit negotiation period.

For Britain to follow the Prime Minister’s lead thus far by working to make a success of Brexit, the next Government must catalyse this robust investor sentiment into concrete investment in the nation’s entrepreneurs.

The foundations have been put into place, it is now the responsibility of the party that wins on Thursday to propel Britain forward.

Luke Davis is chief executive of enterprise investment scheme IW Capital