General Election 2015: David Cameron plans new "help to grow" scheme to create British Mittelstand

 
Lynsey Barber
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Cameron has pledged billions of pounds to plug a funding gap (Source: Getty)

David Cameron has pledged billions of pounds in new funding to help small and medium-sized businesses grow.

The Prime Minister promised £1bn as part of a new “help to grow”scheme to create a British version of Germany’s Mittelstand- a backbone of medium-sized firms across the country.

Speaking to business leaders at the British Chambers of Commerce annual conference, Cameron said the scheme would cover the “valley of death” funding gap that hampers businesses looking to grow.

"Here in the UK, 45 per cent of the job growth has come from our fastest growing medium-sized businesses. Their businesses, your business, are the country's job engine. But they often struggle to get the finance they need to grow.

"We need to think strategically about helping those small firms over the 'valley of death' funding gap so they can become medium firms, and the medium firms can become larger firms," he told delegates," he told delegates.

The “help to grow” scheme will support around 500 fast-growing firms if the Conservatives win the General Election on May 7, he said.

The scheme would guarantee loans made by private lenders, or by co-investing public money alongside private money. Some £100m of new lending will initially be made available in a pilot scheme through the British Business Bank.

As he looked to woo the business community during his speech, Cameron highlighted how the Conservative government had already cut regulation and red tape during the current government.

"You asked for cuts to regulation - we have delivered. We are the first government in 40 years to have less regulation than when we started.

"Domestic regulation has been cut by £10bn over the past four years and, as we announced last weekend, we have a target for the next parliament - cutting another £10bn from your bills. That is a 'deregulation dividend' of £2,000 per business," he said.

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