NatWest has called for more support for thousands of “critical” mid-market companies it says are held back by red tape, planning delays, and restrictions on hiring skilled overseas workers.
Its report into the sector and plans for a new representative council has gained the backing of the Government’s Business Secretary.
NatWest said mid-market companies are the “engine of growth” for the UK economy, but often go unrecognised and overlooked.
It refers to companies with turnover between £25 million and £500 million, bigger than SMEs (small and medium-sized enterprises) but smaller than large corporates.
According to the report, there are 13,000 of these businesses across the UK, representing 0.5% of the total number in the country, but which contribute the equivalent of 200 SMEs to the economy.
Analysis by the bank identified a number of challenges facing the mid-market sector which, if addressed, could boost turnover by £115 billion by 2030.
I look forward to working closely with business, and with NatWest, to ensure these firms have the recognition and support they need to overcome challenges and realise their ambitions
This includes an increasing volume of red tape for companies that start trading internationally, with post-Brexit complexity deterring trade with the EU, according to the report.
Mid-market corporates, particularly based outside London and the South East, face barriers to growth due to poor infrastructure quality, such as transport, housing and broadband.
Firms trying to grow are also subject to lengthy and complicated planning processes that can delay or cancel new projects, especially those in the property, construction and manufacturing sectors.
Furthermore, NatWest’s report found that the sector is likely to face a shortage of skilled workers, with many firms unable to fill the gap with overseas hiring due to increased restrictions.
Major projects – like building the Co-Op Live arena in Manchester – have been held back because it is too expensive and restrictive for firms to hire skilled workers seeking to migrate to the UK, according to the findings.
NatWest said it was creating a new UK mid-market corporate (MMC) council, backed by the Department for Business and Trade, with members from across the sector, starting in 2025.
Paul Thwaite, NatWest’s chief executive, said he hopes to “encourage a step change in support for the critical middle”.
He added: “The first step on that journey is to convene a MMC Council – creating a cohesive identity to collectively advocate and influence for growth-enabling policies and support.”
Business Secretary Jonathan Reynolds said: “This Government’s number one mission is growing our economy – this report provides clear evidence for the vital role that mid-market corporates can play in achieving that
“The sky is the limit for what these businesses can contribute to the UK.
“I look forward to working closely with business, and with NatWest, to ensure these firms have the recognition and support they need to overcome challenges and realise their ambitions.”
