Inquiry into supporting regional growth launched

A cross-party group of MPs has launched an inquiry into how to support business investment and economic growth in all parts of the UK.

The inquiry by the business, energy and industrial strategy select committee will examine the barriers to establishing new businesses, the role of regional bodies in promoting growth and how areas are prioritised for local industrial strategies.

The committee has also published correspondence from the Department for Business, Energy and Industrial Strategy, showing a breakdown of regional funding from the British Business Bank, which aims to increase the supply of finance to smaller businesses.

Figures show how in the year to October 2018, companies in London received 54% more finance than those in the North West region, despite the capital’s population is just 15% higher.

According to the committee, the UK has a long-standing productivity problem, exacerbated by wide disparities in productivity between regions around the country.

While labour productivity is above the national average in London and the South East, the regions of the north of England and the Midlands have productivity levels between 7% to 15% below the UK average.

‘While the government’s industrial strategy aims to boost productivity and growth throughout the country, there are too many areas that are being left behind,’ said committee chair, Rachel Reeves.

‘Regional disparities are increasing faster than any other major European country, meaning vast swathes of the UK are failing to share in the prosperity of London and the South East.

‘Our inquiry will be looking at what more the government can do to help business and whether firms in less productive areas have the support they need to get going and grow.

‘We want to hear about the specific challenges businesses face as well as stories of areas that have been successful in reducing disparities. Greater efforts to narrow regional disparities is key if we are to truly have an economy that works for all,’ added Ms Reeves.

Inquiry submissions can be made on the committee’s website by May 17.