Rachel Reeves is set to unveil a significant expansion of financial support for small and medium-sized enterprises (SMEs), in what is widely anticipated to be one of her final acts as Chancellor.
Her “swansong” Mansion House speech on Tuesday will detail plans to boost British businesses.
The flagship measure involves a substantial uplift to the Growth Guarantee Scheme (GGS), which provides a 70 per cent government guarantee on commercial loans.
Since its launch in 2022, the GGS has provided over £3.7 billion to SMEs.
The Chancellor’s proposals will add £6.5 billion to the scheme, projected by the British Business Bank to assist 33,000 businesses across the UK over the next three years.
Loan terms will extend from six to ten years, and eligibility will broaden to include businesses with a turnover of up to £54 million, an increase from £45 million.
Ms Reeves stated: “Our plan for the economy has put Britain on a stronger footing – restoring stability, getting investment flowing, and delivering reform. We know that small businesses are the backbone of this economy and growth in all our regions, and for too long they have heard ‘no’ when trying to raise the funds they need to grow and create jobs across the UK. When they succeed, we all succeed, and today’s major reforms are the most significant step in years to unleash their potential.”
The announcement comes as Ms Reeves has conceded she will no longer be Chancellor, with Andy Burnham expected to become prime minister as early as July 20, having emerged as the sole candidate in Labour’s leadership contest.
Ed Miliband and Yvette Cooper are among those tipped as potential successors. Additionally, Ms Reeves will announce new financial support for businesses to export their goods and services abroad.
Business Secretary Peter Kyle said: “Today we’re putting our weight behind Britain’s entrepreneurs and innovators, unlocking billions in additional lending to help thousands more small businesses start, scale and succeed because access to finance should never be the barrier between a good idea becoming a great British business.”
These reforms aim to address long-standing challenges faced by small businesses in accessing finance, fostering an environment conducive to investment, job creation, and sustained economic growth across the nation.
