Government steps in to back British business in changing world
The Chancellor announces a multi-billion-pound increase in government-backed financing.
British businesses across the country have today been given further stability and certainty with access to new support through a multi-billion-pound increase in government-backed financing as the world enters a new era of global trade.
The new package will give UK Export Finance (UKEF) the power to expand financing support for British businesses by £20 billion, with small businesses also able to access loans of up to £2 million through the British Business Bank’s Growth Guarantee Scheme.
Thousands of companies are expected to benefit from the move, including those directly affected by tariffs – with iconic British brands like Rolls Royce through to local businesses like Alicat Workboats previously benefitting from similar programmes.
Today’s boost reaffirms government’s commitment to free and open trade, and means an £80 billion boost for businesses, meaning they can access government-backed finance and support to grow their presence both domestically and overseas, create new jobs and drive economic growth as part of the Plan for Change.
New measures come as prime minister goes further and faster to boost growth, working in partnership with business to deliver it.
This week alone has seen swift and decisive action from the government to protect UK businesses and workers by:
- Taking action to keep British Steel operating, saving thousands of jobs
- Increasing flexibility on the zero-emission vehicle (ZEV) mandate to help British carmakers
- Cutting the red tape that slows down clinical trials in the life sciences sector
- Investing up to £600 million in a new Health Data Research Service
- Backing a £30 million package to support the reopening of Doncaster Sheffield Airport which is expected to support 5,000 jobs and boost the economy by £5 billion
Chancellor of the Exchequer, Rachel Reeves said:
The world is changing, which is why it is more important than ever to back our world-leading businesses and support them to navigate the challenges ahead.
Today’s announcement will do that just, with thousands of businesses right across the country set to benefit.
We are going further and faster to boost growth, but we cannot do it alone. Only by working with businesses will we achieve our Plan for Change and put more money into people’s pockets.
Business and Trade Secretary, Jonathan Reynolds said:
Our message to British business is clear – we’ve got your back. This package, backed by the British Business Bank and UKEF, will be a crucial shot in the arm to exporters and small firms looking to trade around the world.
Within a changing world, we need to adapt, and as part of our Plan for Change, this Government is responding. These changes will help to boost growth support jobs and supercharge thousands of businesses across all four corners of the country.
UKEF will also offer businesses partial loan guarantees through more flexible uses of its Export Development Guarantee, helping to mitigate the impact of new tariffs and associated economic uncertainty. Of the £80 billion, up to £10 billion will be allocated to ensure that businesses significantly impacted in the short term by the current situation have access to the finance they need to grow.
The British Business Bank will also expand its Growth Guarantee Scheme by £500 million, which will provide vital finance for smaller businesses as they look to invest and grow. This scheme provides the lender with a 70% government-backed guarantee against loans or other types of finance, enabling lenders to support smaller businesses that would struggle to obtain financing through traditional means – and has so far enabled more than £2.1 billion of lending.
This comes on top of £1 billion of funding for British Business Bank programmes for this financial year, confirmed at Autumn Budget 2024. This includes additional support for smaller housebuilders through the ENABLE Build programme, funding for Start Up Loans and additional funding for three equity programmes supporting innovative high growth businesses
This week, the Chancellor and Business and Trade Secretary also took part in the 13th UK-India Economic and Financial Dialogue (EFD) in order to strengthen ties between the two countries. In addition to India, the UK is negotiating trade deals with partners including the Gulf Cooperation Council, South Korea and Switzerland, which will give businesses more opportunities than ever before to expand into new markets.