Cameron has won over Britain’s entrepreneurs – now he must deliver
The Conservative Party’s victory at the General Election was good for entrepreneurs. Prior to it, 71 per cent of entrepreneurs in our Leap 100 poll, made up of the leaders of some of Britain’s most promising companies, were backing the Tories, versus just 6.6 per cent who wanted an Ed Miliband-led Labour Party. Elsewhere in the press, we saw 5,000 small business owners back the Conservatives and 100 business chiefs come out against Labour. While Labour lurched to the left, the Conservatives held the centre ground, littering their manifesto with policies designed to support business owners. Entrepreneurs are risk-takers – but not when it comes to elections.
Over the years, successive governments – whether Conservative, New Labour or the coalition – have helped make Britain one of the best places in the world to run a business. Venture Capital Trusts, the Enterprise Investment Scheme and R&D Tax Credits have laid the foundations for hard-working entrepreneurs to succeed. With an increasing number of people self-employed or working for small businesses, Miliband’s rhetoric struck the wrong chord for the aspirational many.
Conservative manifesto promises – such as keeping corporation tax at 20 per cent, cutting a further £10bn in regulation and trebling StartUp Loans, together with the practical commitment for the nationwide delivery of superfast broadband – show the new government’s ambitions. Miliband failed to appeal to the country at large; instead, choosing to focus on the mansion tax, the return of the 50p income tax rate, and attacks on non-doms and bankers. Now that the Miliband era is over, Labour needs to move back to the centre. As things stand, the two favourites to lead the party are Andy Burnham and Liz Kendall. Although the unions are backing the former, the odds in the betting markets have been narrowing for the latter. But whoever wins, the Party needs to listen to the entrepreneurs in our midst.
Over the course of the Parliament, the big political issue facing the Tories and the UK at large will be the referendum on Britain’s membership of the EU. There can be no doubting the democratic deficit in Europe’s institutions and the regulatory burdens that membership imposes on British businesses. Yet most polls show that entrepreneurs want us to stay in. Although JCB’s chief executive and owners recently came out in favour of a Brexit, the vast majority of entrepreneurs will vote to stay in. Fears that the Bertelsmann Stiftung and ifo Institute are right in suggesting that Brexit could knock between 2 and 14.1 per cent off UK GDP will weigh heavily.
David Cameron has a tough task ahead and not much time to deliver. Trying to divert the mission of an ever closer union is going against the grain, with a multi-speed Europe sounding too much like a reverse for Europhiles signed up to the European project. Ultimately, the British people will decide our fate in Europe but, whatever the result, Cameron still has time to put the policies in place to ensure that Britain has the wealth creators to weather the storm and that entrepreneurs can continue to prosper here.
Dean Poster is Corporate Partner at Mishcon de Reya.
This article first appeared in City A.M. on Friday 03 June 2015.