Boris Johnson is promising to "build build build". Aping President Franklin D. Roosevelt, Boris has a ‘New Deal’, “to build the homes, to fix the NHS, to tackle the skills crisis, to mend the indefensible gap in opportunity and productivity and connectivity between the regions of the UK".
Chancellor Rishi Sunak will put some more meat on the bones of this announcement in next week’s summer statement. As recommended in last week’s newsletter, he is expected to focus on efforts to support employment.
The Chancellor is believed to be examining options to encourage companies to hire young people. The most straightforward way to do this would be a wage subsidy for companies taking on new staff or preserving jobs. An alternative could be a cut to employers’ national insurance contributions, although the concern will be that it might not translate into new jobs. Whatever is announced on Wednesday, we will let you know how it impacts entrepreneurs via our Policy Update (our latest on more support for startups can be found here).
One tweak could be around the Apprenticeship Levy. Former MP Nick Boles is calling on the government to deliver an apprenticeship guarantee for young people by allowing employers to use apprenticeship levy funds to pay the first year’s wages for all new apprentices under 25, while Robert Halfon MP argues in the FT that the Prime Minister should offer an apprenticeship guarantee to every young person.
The Apprenticeship Levy certainly needs reforming. It requires employers with a payroll of over £3m to pay 0.5% of their wage bill to fund apprenticeships, but it’s not incentivising employers to take on apprentices. The government responded to its failings in 2018 by allowing levy-paying employers to transfer 25% of their levy payments to employers in their supply chain, but this didn’t go far enough.
We argued in Management Matters that companies should be able to transfer 50% of their levy along the supply chain and that the Levy should be rebranded as a more flexible general training levy to allow greater flexibility in terms of appropriate training – particularly shorter courses. Sajid Javid called for something similar in his recent, extensive Centre for Policy Studies report After the Crisis.
Putting the economy in stasis was exactly the right reaction when the virus hit. It’s now clear that we need to tap into the agility of entrepreneurs building products and delivering services to meet changing demands taking place across our economy. Whatever is announced next week, the focus shouldn’t be on stimulating demand for what people wanted before Covid-19 – it needs to be about empowering entrepreneurs to adapt to a world in flux.
Go with the flow
The British Library’s Start-ups in London Libraries delivers webinars and across 10 borough libraries. The aim is to provide information access and support for individuals and start-ups looking to start and build their businesses, especially focused on disadvantaged groups. They are looking for an expert to volunteer to provide a training session on cash flows and balance sheets for startups. If you willing and able to lend a hand – or you know someone can – drop them an email.
Spider, man
The Postcode Lotteries Green Challenge has announced the 25 start-ups that have made it through the first stage of the international competition supporting green entrepreneurs. Seven of the companies are British, including Jiva Materials, which is manufacturing the world’s first fully recyclable printed circuit board to easily and safely recover precious metals, and Spintex, which through a spider inspired process artificially spins the high performance silk fibres. If you like your glass half full, check out all the amazing nominees' innovations.
We believe entrepreneurs will be key to solving many of the world’s biggest challenges – including environmental ones. That’s why we’re busy undertaking a research project on green entrepreneurship with the Enterprise Trust. Find out more here and drop Eamonn Ives an email if you want to get involved.
Startup steps from h
Disruption, The Panoply and h Foundation have developed the Future Leaders Programme in response to coronavirus. It is focused on supporting 21 to 30-year-old entrepreneurs who are BAME, from a low-income background or who have a disability. The 9-week fully digital programme includes a £200 per week bursary, a mentor, workshops and a final pitch event. Apply here.
Big Deal