The Chamberlain News

I’ll back small businesses over ‘quick win’ of foreign money says Lib Dem mayor candidate

Backing existing small and medium sized businesses may be a better way of boosting the West Midlands’ economy than “the quick win” of luring foreign investors, according to Liberal Democrat mayoral candidate Beverley Nielsen.

The former regional director of the CBI said her priority if elected would be building home-made success by investing in “the backbone of the economy” to drive forward the SME sector.

In an attempt to portray herself as equally business-savvy as Conservative mayoral candidate Andy Street, the MD of John Lewis and former chair of the Greater Birmingham and Solihull LEP, Ms Nielsen set out her credentials:

For the record, I have many supporters in the business community. Especially amongst our manufacturers, the small and medium-sized, companies making up the backbone of our West Midlands economy and all too often overlooked as we favour the quick win of an overseas investor, or sell off our family silver in the latest privatisation, or outsource our public sector contracts to overseas companies who don’t employ local people and charge a premium in the process.

I am firmly on the side of business. I have worked hard in and with West Midlands-based businesses for the past twenty years – in the CBI as CEO, Heart of England Tourist Board and as a Director at AGA Rangemaster and MD Fired Earth.

Ms Nielsen also took a swipe at former CBI director general Lord Digby Jones who has announced he is backing Mr Street as the only candidate on the side of business.

Expanding on her argument in favour of SMEs, Ms Nielsen said:

This is not simply about inward investment, procurement or privatisation as a means of driving growth in the UK where we do not have control of our assets and where business horizons can too often be short term.

For me, the priority is about building our own home-made success. Investing in the backbone of our West Midlands economy to build the small and medium-sized businesses that make up 99 per cent of companies across the region.

The figures back this up. Whilst we have been largely single-minded in our focus on inward investment, figures suggest that indigenous business employment growth has been double that resulting from inward investment.

SMEs make up 53 per cent of all UK employees. They are more often than not independent, family-owned, more likely to train more and be innovative, rooted within local communities, employing the people living there, often across generations.

Ms Nielsen added CBI research suggested that “highly adapatable and innovative” SMEs could add as much as £20 billion to the economy. But this could only happen if SMEs were properly supported by central and local government.

She quoted Mike Leonard, CEO of Building Alliance:

We seem to treat our home grown businesses in the same way banks treat their customers. Apparently a new customer is worth a lot more than an existing contributor.

A little bit of help for our own businesses would go a long way. But instead we throw a lot of money at things which often don’t give a solid return on investment. The Chinese have had over £75 million of Government funds to invest into a new factory in Coventry, whereas it would be very hard for any British business to get this kind of support when they’re building a factory.

Manufacturing things from the outset is the best wealth generator in any economy. With 80 per cent of our economy as services this cannot be healthy, especially in a Brexit scenario. It’s about the multiplier effect and the degree of interdependence of our manufacturing businesses.

Ms Nielsen added:

I would like to see us focus, first and foremost, on growing our own business base. Understanding our local business clusters and supply chains – groups of interdependent companies collaborating and competing and in the process gaining greater competitive advantage, sales, market share and business profile.

A recent study conducted into businesses in the Jewellery Quarter showed that the Industry cluster based there was more productive than industry averages, with 12 per cent more revenues generated for each person employed than by the average small company in Britain.

Other countries have found that by focussing on growing your own you can boost economic growth considerably. Some even invest 80/20 in supporting their indigenous business compared to inward investors.

If I am elected metro mayor I can pledge that this group of businesses will be my top priority.