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UK companies 'dominating Europe' DTI 'may be heading for shake-up'
(about 7 hours later)
UK companies dominate a champions league of European business, a government report has said. The Department of Trade and Industry (DTI) may be heading for a revamp, the UK's trade secretary has hinted.
Of the 750 top European firms, UK-based businesses were responsible for more than a third of Europe's total profits. Alistair Darling also told the British Chambers of Commerce (BCC) that some MPs had suggested the DTI be scrapped.
But, UK firms believe it is harder to start and grow a business now than when Labour came to power in 1997, a British Chambers of Commerce (BCC) report said. But, at the BCC annual meeting, he did add that much of the DTI's funding would need to continue in many areas, such as nuclear decommissioning.
The contrasting studies may spark a row between the Trade Secretary and the BCC at its annual meeting later. Mr Darling's comments came as a BBC survey of 145 firms found that only 8% saw the DTI playing an important role.
"Businesses are succeeding in the UK through the desire and ambition of the hundreds of thousands of entrepreneurs who are battling to succeed in the competitive globalised economy," said BCC chief David Frost. Meanwhile, a further BCC poll said UK businesses found it harder to start and grow a business now than in 1997.
"Politicians now shy away from talking about wealth creation, instead focussing all their energy on how to spend the money the business community creates." Revamp?
'Poor training' "The question is, could the DTI be improved, should changes be made? The answer is yes," Mr Darling said.
According to the BCC, 69% of the 145 businesses surveyed said it was harder to set up and develop a business now than 10 years ago. Both Liberal Democrat Treasury spokesman Dr Vince Cable and shadow foreign secretary William Hague told the conference they were "sceptical" about what the DTI does.
The secret ingredient to much of the success from our biggest companies is small business Alistair Darling, Trade Secretary However, BCC chief David Frost did admit that without a strong DTI, the views of the private sector may "become an afterthought in government".
Mr Frost told BBC Radio 4 that companies blamed "more legislation, more red tape" and the fact that young people, in particular those at the bottom end of the system, "do not have the right attitude and skills" to enter the world of work. But Mr Frost did also warn that the government must act to ensure young people leave school with a good enough education to get a job, as half of Britain's youngsters are leaving school without five decent GCSEs.
"The support and help is not there for training," he added. "It is nothing short of a national disgrace. This is in the 21st century, not Victorian Britain," he told the London conference.
While Trade Secretary Alistair Darling agreed that there were problems with a skills shortage in the UK, he did add that the education and quality of people leaving university had improved. Mr Frost also called for "enterprise zones" to be introduced around the UK in an effort to encourage new businesses.
"We are seen by the World Bank as a good place to do business and start up," he added. Among the "radical" measures Mr Frost suggested to promote new businesses were setting up areas where companies were exempt - for a short time - from rates and employment laws.
'Secret ingredient' Business hurdles
The Department of Trade and Industry's new report underlines the point saying that there are now 600,000 more small businesses in the UK than in 1997. The call came as the BCC revealed that business leaders blamed a lack of education and skills, as well as an increase in red tape for companies finding it more difficult to launch new businesses.
"The secret ingredient to much of the success from our biggest companies is small business," Mr Darling will tell the BCC's annual conference. According to the BCC, 69% of the 145 businesses surveyed said it was harder to set up and develop a business now than 10 years ago when Labour came to power.
"They deliver half of UK output and over half of turnover. The findings were in stark contrast to a government study which found that UK companies were dominating a European champions league of business.
"The ingenuity, skills and enterprise they show are helping win over our French and German competition as the centre of choice for European business. Of 750 top European firms, UK-based businesses were responsible for more than a third of Europe's total profits, the report found.
"Which is why it is so important that we support research and development, raise skills and help companies export."
Meanwhile, a further report from business information firm Experian showed that corporate failures fell by almost 9% during the first three months of the year.
A total of 4,433 companies failed during the period, 430 less than at the same time last year.