GrowthBusiness plots a course through 2012 and picks out the biggest developments in the mid-market business space.
It’s been a turbulent year for growing businesses in the last year, despite the government’s commitment to its ‘Plan for Growth’.
Outlined in its Budget address in 2011, the initiative is hoping to create a competitive tax system, make the UK the best place in Europe to start, finance and grow a business and encourage investment and exports.
Throughout 2012 GrowthBusiness has tracked the most important developments for fast growth businesses as well as profiling some of the most exciting entrepreneurs and investors.
Kicking off the start of the year was the Entrepreneurship Inquiry, which debated issues including unemployment, finance and skills and saw contributions from Labour’s Lord Harrison and Conservative MP Martin Vickers.
Then came the news that the government’s much maligned Project Merlin finance scheme had fallen short of its £76 billion target by only £1.1 billion, not exactly a ringing endorsement for the organisation of Britain’s five biggest banks.
To celebrate the best entrepreneurs and investors in the country, our Power Top 50 list placed Index Ventures’ Ben Holmes at the top of the tree in February for his longstanding pedigree which has seen investments in Betfair and LOVEFiLM.
In March, George Osborne’s Budget speech saw a new National Loan Guarantee Scheme implemented alongside the scrapping of the 50p tax rate, fall in corporation tax and creation of a Patent Box to keep businesses in the UK. However, Osborne’s gifts were met with a mixed reaction when we spoke to business owners and advisors.
Also that month, internet behemoth Google landed in Tech City with its special hub for start-up businesses. The business centre has now gone on to host a number of key government announcements and seed camps.
May saw non-bank providers of finance offered the chance to grab a share of the £100 million Small Business Tranche of the Business Finance Partnership. It is hoped that the funding will allow non-traditional channels like peer-to-peer platforms to ease the flow of credit to SMEs. This month Funding Circle and Zopa were announced as successful candidates.
A more incentivised system for investors was rubber stamped in June when the government received EU backing for its EIS and VCT changes. Investments made after 5 April saw maximum annual amounts that could be invested in a single company increase to £5 million.
Business secretary Vince Cable also used June to lay down what he described as the most ‘far-reaching reform’ of directors’ pay in a decade.
Biggest interviews of 2012:
- Jon Moulton – Rescue services
- Brent Hoberman – Next minute
- Dries Buytaert – From dormroom to boardroom
- Ben Holmes – Front-runner
- Ratheesan Yoganathan – Doing it the hard way
During July, in a speech to the Institute of Chartered Accountants, Clegg said that the economy ‘desperately needs an injection of responsibility’ and is now encouraging more of what he calls stakeovers, namely staff buy-outs to save ‘great British firms’.
The government rolled out its plan to encourage employees and bosses to consider the employee ownership model, especially when a business is being sold.
To coincide with the start of the London Olympics, at the end of July the British Business Embassy was unveiled. A series of trade and investment events were held over the course of the Olympics to champion the UK to inward investors.
Despite a wildly successful Olympics on the track, in the velodrome and in the water, in September, figures revealed that life-for-like August sales at mid-tier retailers in Britain fell by 0.5 per cent as they failed to take advantage of the sporting buzz.
A year on from the implementation of a new Takeover Code in the UK, new findings in September showed that there had been almost a halving in the amount of time prospective businesses were targeted.
To bring a bit of Autumnal cheer to the country, Vince Cable allocated £10 billion to set up a new business bank. However, despite more details being revealed during the Autumn Statement, businesses are still unclear about how the initiative will benefit them.
The government’s apprenticeships drive received a boost in October when figures filtered through showing the number of positions being taken up had risen by 10 per cent during the 2011/12 academic year.
Then came George Osborne’s third Autumn Statement. Included in his end of year gift package included a further reduction in Corporation Tax, more details on the Business Bank and a surprising tenfold increase in the Annual Investment Allowance.
Following Osborne’s speech, which went down better than his Budget address earlier in the year, the government announcement that HM Treasury would be leading a consultation on providing legislation for peer-to-peer finance providers. It is hoped the move will provide legitimacy to the process and provide SMEs with new avenues of finance.
All in all it’s been a busy year with a raft of new government initiatives aimed at boosting growth brought in. Many like the employee ownership scheme and the Business Bank have been met with mixed reaction, and only 2013 will reveal whether David Cameron’s coalition has got it right. Join us again in the New Year as we track all the important news for entrepreneurs and business builders.