By Brian Chernett
Alastair Darling presented his first Budget last week in the shadow of the Credit Crunch and, it is generally agreed, with little room to manoeuvre. Much has already been written about the detail of the Budget and, you’ll probably be pleased to know, I’m not intending to try another analysis of it. I want to give some personal responses to the Government and Enterprise, maybe not words you expect to hear in one sentence yet the ambitions seem to be right. As with all Government Policy, the real test will be in the implementation.
Alongside the Budget, the Treasury and the Department for Business Enterprise and Regulatory Reform (BERR) issued a White Paper to “make the UK the most enterprising economy in the world”. A powerful goal and the white paper – Enterprise: Unlocking the UK’s talent — sets out five main ‘enablers of enterprise’. These are culture, knowledge and skills, access to finance, regulatory framework and business innovation.
The main provisions include:
o reducing fear of failure and the stigma of insolvency
o inspiring young people
o encouraging women’s enterprise
• knowledge and skills
o improved enterprise education
o The National Enterprise Academy being developed by Peter Jones in conjunction with the Government was announced prior to the Budget with Alastair Darling and Gordon Brown in attendance
o developing knowledge and skills for enterprise among women
o business support and mentoring
• access to finance
o changes to small firms loan guarantee scheme to make additional funds available and the removal of the 5 year restriction
o establishing acapital fund for women-led business
o building business angel capacity
o renewing Enterprise Capital Funds with a third round of £50m and the promise of £100m for two further rounds
• regulatory framework
o target to reduce regulatory burden by 25% by2010
o rethinking regulation of small firms using the approach of “think small first”
o independent review of official advice to make it more dependable
• business innovation
o innovation vouchers to be used in association with universities
o Small Business Research Initiative
o better access to defence contracts for small firms
o university enterprise networks
As a wish list, the White Paper has a good handle on what is needed to encourage enterprise. What is yet to be seen is whether the drafters and supporters of the White Paper are strong enough to resist the political realities of the next ten years — the period the White Paper covers. Most businesses, in my experience, want nothing more than the access to the right finance, to good people and to be left alone as far as possible by regulation. That really would be changing the culture. The reality of doing business is that taxation and regulation is often at odds with enterprise and that government policies can cause havoc if not thought through. Government consistency is needed to make it possible to plan for the long haul.
As an example, most business people want to benefit from their efforts through exit. Why else would they put up with the hours and difficulties inherent in setting up and growing a business? Recent changes — Capital Gains Tax for example – have not considered this aspect. Even the Government concession allowing taper relief for some business exits seems to disadvantage serial entrepreneurs. Yet these are the very people who can and will ensure that enterprise grows.
I was glad to see that Peter Jones is involved in the development of Enterprise education. To transfer and develop the skills and habits of enterprise needs those who have been there and done it to help those who are starting out. In general, Government and Higher Education tend not to have these people on tap. So the wider involvement of business people in delivering a stronger enterprise culture is a good thing.
Of course, I do have an interest in this area of policy — both business and personal. I believe in encouraging businesses to grow and that it can only be done by helping people. My organisation, the Academy for Chief Executives, already helps businesses grow by mentoring and supporting newer business people using the experience of members who have already done what they are attempting. Our mastermind sessions often provide powerful solutions to the problems faced by members.
I am looking forward to getting involved with the Government and other business leaders in developing more business growth. Whether we can deliver “the most enterprising economy in the world” depends on many factors but it is worth attempting — if Government ministers — including the Prime Minister – are truly prepared to do what is needed.
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