Robert Begbie visits Manchester Accelerator to talk about innovation, mid-markets and economic shocks

The Government needs to try to give businesses reassurance and stability at a time of global crisis – that’s the message from a key NatWest leader as he visited the North West to meet entrepreneurs. Robert Begbie, CEO Commercial and Institutional at NatWest, visited the bank’s Manchester business accelerator to meet some of the entrepreneurs growing their businesses from the Spinningfields hub.

He spoke to BusinessLive about the bank’s network of Accelerator hubs that aim to support scale-ups and start-ups across the country. And he and North West regional director Steve Sankson also spoke about the power of mid-market firms to drive the economy in Manchester and beyond.

Asked about the state of the markets after the Iran war, Mr Begbie said the most important thing the Government could do in the medium term was to ensure stability in policymaking.

He said: “The Government can’t control what’s going on in the Middle East. That’s completely outwith their control. But stability in the environment for businesses to operate in is hugely helpful.

“The Government has set in train a number of things around their industrial strategy, their trade strategy, overall growth, regulatory reform, and all of those will make a difference. But they take time. The culmination of those things over a period of time all helps, they’re all building blocks to creating a more sustainable and higher growth, higher productivity economy.

“A combination of that, plus everybody else including us playing our role in that growth, will ultimately create the conditions for companies to grow and the economy to grow.”

It’s too early to say what long-term impact the ongoing conflict in the Middle East might have on the economy, but Mr Begbie said fragile business confidence was likely to be damaged.

He said: “If you look through the last 10 years, what we found generally is that businesses have done incredibly well to cope with those shocks, whether they’re domestic, international, whether they are inflation-related, whether they’re health-related as in the case of the pandemic or geopolitical-related. And this is another one.

“It’s unfortunate because we felt that for the first time in quite a long time there was a pretty stable set of conditions for businesses to invest and grow. And with that comes confidence and the confidence to invest in your business, the confidence to grow, confidence to want to expand your markets or expand your even your geographies – part of our role was to help customers to expand out where they do business.

“Growth was minimal, but at least it was growth – rates were coming down, inflation was coming down, we’d come through the other side of some of the Budget measures… certainly talking to businesses locally and talking to the teams, it felt like there was a growing mood of optimism and confidence in the economy.

“I think it’s too soon to say that what’s happened in the last two weeks is going to permanently damage that, but clearly in the short term it just introduces uncertainty.”

The magic middle: Why mid-market companies are vital to growth

Mr Begbie said NatWest’s own recent results had been strong with growing business lending, including a 50% growth year-on-year in its gross lending to it Business Banking customers. He said: “If our lending book is growing in the mid market we know there’s something good going on in the UK mid market

“What we started to see at the end of last year to this year was more M&A activity around the large corporate end of the UK… and as a major bank into UK PLC we’ll be involved in some of those transactions.”

Mr Begbie said the bank wanted to be ambitious for itself and for its customers, and said: “We’re now in a situation where there’s a bit of uncertainty, but with uncertainty that gives us a chance to step up and help support those customers.”

NatWest has had a big focus on mid-market firms, which it says are vital to the economy but can often be overlooked by policymakers in favour of corporate giants and headline-grabbing start-ups. Earlier this month the group appointed 12 Mid-Market Champions in 12 UK nations and regions.

Mr Begbie said the mid-market was “responsible for so much of the employment in the UK, so much of the growth and a one per cent growth in that sector is worth many times more.”

He was at Number 11 Downing Street earlier this month for the first Mid-Market Growth Council reception, alongside NatWest CEO Paul Thwaite.

He said: “We took some of the members of the council but we also took some of our mid-market companies from up and down the country and it was great. Paul spoke briefly the Chancellor spoke. We all have the same objective here – everybody in the room wants to help stimulate growth and make the country a more prosperous place, but that can only happen if we put all the things in place.”

The North West’s innovation champion is Steve Sankson. He said: “If you think about business support, it’s targeted at SMEs, start up, scale up, innovation. Big businesses typically look after themselves. In that regional mid market business, there’s actually a lack of targeted support or intervention.

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“If you look at any growth plan from a regional perspective, they focus on emerging sectors, emerging clusters. But true growth comes from the mid-market as well.

“Mid-market businesses have got very common issues. If you get a group of 20 mid-market businesses, they’re all facing the same skills issues. They’re grappling with increasing complexity and burden being placed on business. Actually being able to address some of those issues either through policy, or collectively coming together to say ‘what’s the issue in Manchester’, could be quite powerful.

“Everybody’s talking about Greater Manchester right now. Mid markets grow more quickly in Greater Manchester than any other region, they’re more innovative in Greater Manchester than in any other region.”

‘We’re helping people live out their dreams’

Mr Begbie said he loved visiting NatWest’s Accelerators across the country. The Manchester one has helped hundreds of entrepreneurs, and on the day of BusinessLive’s visit a group of entrepreneurs was learning about how to create perfect short, sharp pitches for investors.

He said: “I’ll tell everybody who works for us to go to an accelerator. We’re helping people live out their dreams here. But also, we attract some of the most passionate, enthusiastic colleagues of anywhere in the organisation to work in our accelerators.

“Those accelerators, and they’re all slightly different, all share the same themes of passionate colleagues and passionate entrepreneurs. There’s some incredible successes as well. I met one of the founders of a business that went through the Birmingham Accelerator 10 years ago. And that is now a £50m business. And they became advocates for us. So we get the benefit of seeing businesses becoming successful businesses and we played a small part in that.”

NatWest is also looking to grow its accelerator network by connecting with universities.

Mr Begbie said: “We announced last year we were going to put the equivalent of these accelerators into 10 universities up and down the UK. We’ve announced four, the other six will follow. We’ve had one in Warwick University for a while, which is a clean transport accelerator.

“The reason for picking universities is to take some of those ideas that spin out of universities, but struggle to find a way to commercialise.”

The bank has also launched a strategic partnership with the University of Manchester aimed at improving student employability and supporting innovation.