On Track for Growth: An Interview with Gareth Thomas, Parliamentary Under Secretary of State The UK government's commitment to fostering an environment conducive to small and medium enterprises (SMEs) is becoming increasingly apparent, with a series of initiatives set to reshape the entrepreneurial landscape.

The UK's 5.5 million SMEs are about to get a boost, thanks to a revamped Board of Trade announced by Business and Trade Secretary Jonathan Reynolds. With a team of high-profile business leaders including Apprentice star Mike Soutar, BT CEO Allison Kirkby, and Small Business Britain founder Michelle Ovens CBE -the Board is tasked with unlocking export potential and driving economic growth.

Reynolds said:  "Small businesses are the driving force of our economy, both at a local and national level, which is why, as part of our Plan for Change we're determined to ensure that all SMEs have the tools at their disposal to thrive.  The new Board of Trade will be another tool in our arsenal to get more businesses trading around the world and taking advantage of our fantastic FTAs. This won't be a chin-stroking talking shop, because I'll be urging them to boost exports and get more SMEs trading across all their sectors. Because we know that when more small firms export, it leads to more jobs and higher wages and grows the economy." 

Talking exclusively to Entrepreneur UK, Gareth Thomas, Labour (Co-op) MP for Harrow West and Parliamentary Under Secretary of State at the Department for Business and Trade, says these measures aim to address the persistent challenges faced by entrepreneurs - particularly those related to access to finance, international expansion, and scaling operations. Thomas outlines that these initiatives are intended not only to support existing businesses but to create an ecosystem that will facilitate the growth of new UK enterprises in the coming years.

Access to finance:
Access to finance has long been identified as one of the most critical challenges for entrepreneurs in the UK. Many businesses struggle with securing the capital needed to establish themselves, and once they've reached a certain size, further financing for expansion is equally difficult to obtain. According to Thomas, the government is keenly aware of these issues and has prioritised them in the upcoming policy revisions.

"We are hoping to publish our strategy before the summit," Thomas remarked. "We will launch a Call for Evidence on access to finance because we know that's often one of the biggest problems that entrepreneurs face in terms of getting their business off the ground."

The government's Call for Evidence aims to pinpoint the precise barriers preventing entrepreneurs from accessing the funding they need. These barriers range from difficulties in securing loans at affordable rates to more systemic issues such as the challenges faced when opening a business bank account. One initiative that has already gained traction is the extension of startup loans, a measure that has received additional funding in the recent budget. However, the focus is particularly on areas outside London and the South East, where access to finance is more limited.

"There are businesses in London and the South East that struggle to access finance as well," Thomas acknowledged. "But we are particularly focused on underserved regions and communities. Women entrepreneurs, ethnic minorities, and veterans face disproportionately greater difficulties, and we need to find targeted ways to address these issues."

Exporting potential: New initiatives for global market access
International trade presents a significant, albeit underutilised, opportunity for UK SMEs. Despite the UK's status as a G7 economy, a smaller proportion of small businesses in the country engage in export activities compared to other nations. The government's latest initiative, aimed at increasing the export capabilities of SMEs, is a direct response to this issue.

"The new Board of Trade initiative is focused on helping smaller businesses get access to overseas markets," Thomas said. "We know we need to shift this situation if we're going to see more growth and help small businesses realise more of their potential."

As part of the government's Plan for Change, the new Board of Trade unveiled today has been tasked with driving export growth for the UK's 5.5 million SMEs. The aim is to boost exports, which in turn will support economic growth, create jobs, and increase wages. Small businesses, particularly those in underserved regions, have often been unable to tap into global markets. Thomas's department is working to rectify this imbalance by providing businesses with the tools, resources, and expertise needed to scale their operations beyond domestic borders. The expected outcome is a more globally competitive cohort of SMEs, with greater opportunities for international trade and growth.

Revitalising the high street
While global expansion is crucial, Thomas understands that domestic markets are equally important. The UK's high streets have long been the heart of local economies, but many are struggling with reduced footfall and rising vacancies. For small businesses in these areas, support for revitalising the high street presents a promising opportunity. Emma Jones from Enterprise Nation was down recently in Ramsgate, talking about rejuvenating the high street and bringing some life back into the community.

"This is exciting because it's not just about revitalising the high street, but also about breathing life into local communities," Thomas noted. By helping small businesses thrive on the high street, the government aims to create more dynamic local economies. Such efforts would not only help revive struggling areas but also provide small businesses with a sustainable foundation from which they can grow.

Scaling up: Addressing the growth barrier
For businesses that have succeeded in establishing themselves, scaling operations remains one of the most significant challenges. While some businesses have managed to reach a certain level of success, many find themselves constrained by a lack of finance when trying to expand further. Thomas acknowledges this issue and highlights the government's efforts to address it.

"We've had strong representations put to us about the need to improve how we help businesses scale up and stay in the UK," he remarked. "Quite a few businesses feel they can only get to a certain level before they have to go overseas to get access to the finance they need."

To address this the government is collaborating with the Scale Up Institute and other stakeholders to reassess the current ecosystem for scaling businesses in the UK. A dedicated focus on scale-ups, including the potential establishment of a government body specifically for scaling, could create a more conducive environment for businesses looking to expand.

Tackling late payments
Late payments continue to be a pervasive issue for SMEs, often leading to cash flow problems that impede growth. Recognising this, Thomas's department is working on solutions to ensure timely payments and reduce the financial strain on small businesses.

"We've already taken some steps, but we're about to launch a consultation on what more we can do to help tackle this issue," Thomas stated. "This may include new powers for the Small Business Commissioner to help address late payments more effectively."

Late payments not only cause immediate financial difficulties but also create a cycle of uncertainty that hinders long-term planning for SMEs. By addressing this issue head-on, the government hopes to provide businesses with a more predictable cash flow, allowing them to reinvest in growth and innovation.

A cultural shift: Celebrating entrepreneurship
Beyond the practical steps to improve finance, scaling, and trade, there's a bigger cultural shift that's needed to really support entrepreneurship in the UK. Right now, failure still carries a lot of stigma, and entrepreneurs who don't make it can face harsh judgment. That makes people less likely to take risks or try something new. But it's that very willingness to take risks and learn from failure that sparks innovation and drives progress.

"Many entrepreneurs take huge risks to get their business up and running," Thomas points out. "And perhaps unlike the US, there can be a bit of stigma if you haven't made it work. We need to get rid of that and celebrate the courage that entrepreneurs have in setting up their businesses."

This cultural shift is central to the government's broader vision for the entrepreneurial ecosystem in the UK. By celebrating risk-taking and viewing failure as a learning opportunity, we can create a more supportive environment for entrepreneurs, ultimately encouraging greater innovation and resilience within the sector.

The path ahead
The UK is at a pivotal moment in its support for SMEs. With a range of initiatives designed to improve access to finance, foster export growth, tackle late payments, and facilitate scaling, the government's strategy aims to provide small businesses with the resources they need to succeed.

"We know there's huge potential that we're not properly tapping into yet," Thomas concluded. "But with these new initiatives, we're confident that we'll see more small businesses realising their full potential, both in the UK and overseas."

The SME Summit, alongside the Board of Trade's appointment of expert advisors, represents a significant turning point for UK businesses. With a fresh focus on global competitiveness, the UK looks set to foster innovation and create new opportunities. Could this be the moment the UK reclaims its business edge?