Almost three quarters (72 per cent) of small- and medium-sized enterprises (SMEs) based in the North of England believe that regional inequality is an issue in the UK’s business community, in terms of both economic growth and prosperity.
According to a new survey by Nucleus Commercial Finance, 56 per cent of SME leaders across the UK believe that there is regional inequality, while just 17 per cent believe that the regions are “very equal”.
Older business owners were more likely to believe in regional inequality, with 83 per cent of those aged 55 and over saying that regional inequality was an issue in the UK, compared with 35 per cent of those business owners aged between 18 and 34.
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The Nucleus survey also found that the North/South divide may have worsened during the pandemic, with 44 per cent of SME leaders believing economic inequality has become more apparent among the regions. In the North West, this figure rose to 66 per cent.
Furthermore, almost a third (32 per cent) of SME leaders believe that the location of their business has negatively impacted their ability to access finance during the pandemic.
The survey came days after Prime Minister Boris Johnson gave a speech about the government’s “levelling up” agenda. The speech has been criticised by business leaders for its lack of clarity on how it plans to address the economic gap.
“Despite years of promise from the government to address the North-South divide, it’s clear SMEs are still feeling its impact and many don’t ever see it being resolved,” said Chirag Shah, chief executive of Nucleus Commercial Finance.
“It’s particularly worrying that business owners have felt the force of this when it comes to accessing finance. No business should feel they have less of a chance of receiving government funds due to their geographic location, but this is a harsh reality.
“SMEs are the lifeblood of the economy and play a vital role in the communities they serve. In order for them to thrive, we need to provide them with the right tools to help them futureproof their business and ultimately succeed for years to come. Looking ahead, the government must do more to level up and unite the country, and the Prime Minister’s recent speech will be crucial in demonstrating its commitment to boosting local businesses.”
More than a third (35 per cent) of SMEs said they believe that equal business investment across the regions will never be resolved, while a further 34 per cent believe that government investment will never be addressed.