Small business soapbox
UK entrepreneurs give their views on Labour’s enterprise legacy
It may not happen until next spring, but the prospect of a general election certainly gets entrepreneurs talking. The state of the economy and the current government’s shortcomings and successes on enterprise makes for some interesting discussion. We spoke to some those on the frontline of Britain’s entrepreneurial battle. Here are a handful of their views.
Is the UK a more entrepreneurial since 1997?
Laura Tenison, founder, JoJo Maman Bébé “There is less fear but I am not sure that is such a good thing. The media has portrayed entrepreneurialism as a way to make millions with ease but the reality is that most self employed individuals are extremely hardworking and manage to survive and make a living but will never be Mr Bannatyne.
Barry Houlihan, chief executive, MIG “Yes, but this is more to do with a general movement starting in the 80’s towards risk taking in starting businesses as opposed to the attraction of long term secure employment previously. It is doubtful if any real change has happened due to more recent government policy.”
Charlie Mullins, founder, Pimlico Plumbers “Definitely less entrepreneurial – I believe that true entrepreneurs will always find a way to set up and run profitable businesses, but in the last 12 years I have noticed a concerning change in people’s mentalities from thinking ‘how can I make this idea work?’, to a culture of ‘what’s going to stop me?’.”
What, if anything, has Labour got right?
James Caan, TV Dragon and founder of private equity firm, Hamilton Bradshaw “The area in which the Labour government has certainly performed well is in the proportion of business start-ups by 16-24 year olds, which rose from 6.5% in 2003 to 8% by 2007. Initiatives such as the Make Your Mark scheme have heightened awareness of entrepreneurial ventures at a younger age. Many of the fan e-mails I receive from Dragons’ Den are from kids under 16!”
David Soskin, co-founder and chief executive of Howzat Media and former chief executive of cheapflights.co.uk “Nothing. Labour killed stone dead the golden goose they were handed in 1997. Three things they have failed to address are sorting out the education system, the crumbling transport infrastructure and making Britain the European Korea with high-speed internet access for all. The ludicrous Digital Britain report was just another example of headline-grabbing replacing proper policy.”
What’s been most disappointing about Labour’s enterprise policy?
Joel Hagan, chief executive of clean tech firm Onzo. “The definition of enterprise has been broadened and blurred. Whilst I’m very supportive of social enterprise and what it does for society, I am also fiercely supportive of entrepreneurialism and what it does for the economy.”
James Caan “Not enough has been done to rectify the regional imbalances of investments and it continues to be a greater challenge starting a business outside of London. Secondly, the productivity gap of British industry in comparison with other counterparts leaves much to be desired. The recession has highlighted this further.
Barry Houlihan “There never seems to be a coherent, consistent strategy from the top down. The financial services industry was a huge tax cash cow and hence focus for the government until it all went tits up. Now it’s manufacturing and technology which is getting the focus.”
Do the Tories represent a better bet?
Laura Tenison “I’m not sure. I had hoped they might, but I’m disillusioned between campaign promises and the realities we are to expect when a new party gets into office. My hopes were huge for Labour on the back of the very sound campaign challenges promised by Gordon Brown to small businesses before they got into office. We have been disappointed.”
Charlie Mullins “From what I’ve heard from talking to George Osbourne recently they are far more business friendly, and far more open to good ideas.”
Joel Hagan “Yes, probably. They instinctively represent lower taxation and smaller government. It’s more likely their MPs will have commercial experience rather than public sector experience so there’s a better understanding of long-term value to the economy.”
James Caan “The Conservatives have been saying all the right things. They want to ‘find the big funding gaps’ and ‘force the banks’ to support small businesses. On paper many ideas sound as if they will resolve the problem. But I have to ask: where’s the money coming from and beyond the statements of what they promise to do, how will they do it?
What do you think about the 50% tax rate for those earning over £150,000?
Charlie Mullins “It’s a major restriction to entrepreneurial spirit, it’s a penalty on success, and all it will do is send some top earners abroad, which in today’s globalised world is not nearly as hard as it was for the tax exiles of the 1970s. I’m no Chancellor of the Exchequer, but for a start someone needs to admit that cuts are necessary and then maybe a proper debate can be had about the budget.”
Laura Tenison “Whilst it is always a shame to loose tax payers from the country (and there is no doubt his policy along with the NON-DOM tax has encouraged many to flee), this rate of tax will effect a few people who can well afford it. I believe in social justice and nobody needs to earn move than £150,000.”
Joel Hagan “I’m not advocating regressive taxation, but I don’t support progressive taxation of this sort. It doesn’t raise a lot of money and it discourages those people who earn most – who probably generate employment by their endeavours and by spending their money.”
Has the government done enough to help struggling small businesses?
David Soskin “The government’s failure to persuade the banks to lend to small businesses in the current recession and its endless increases to the tax and regulatory burden far outweigh any apparently ‘business friendly’ measures they have introduced.”
James Caan “Labour’s been doing all they possibly can but they face almost insurmountable problems. Their schemes have struck a good balance between supporting small businesses and financial prudence, but the current economic situation still means more small businesses will lose money. The main problem is the banks are still not providing sufficient support and that is with whom we must now place the pressure.”
If you were in power, what would be central to your enterprise policy?
Richard Reed, co-founder, Innocent Drinks “I’d introduce tax incentives for people who make long term investments in start-up enterprises. The hardest part of setting up a business is raising the funds.”
David Soskin “I would allow small businesses to opt out of many of the rafts of bureaucracy for which they are ill equipped to deal – such as the employment legislation that is designed for larger employers with their armies of HR personnel and their vast legal budgets.”
Charlie Mullins “My government would make sure the UK has the skilled trades people it needs for the next 30 years. I would implement a policy that would see employers subsidised to train apprentices. Employers would get a three year NI contribution holiday, with my government covering wages in year one. In year two the scheme would see wages split 50/50, and the employer would pay all the wages in the third year.”