While the week started well enough, with the Chancellor’s Mansion House announcement on unlocking pension funds (something we have long campaigned for), it hasn’t taken long for things to sour. Yesterday we found out that the Government will fund public sector pay rises by increasing visa fees. Whatever you think about public sector pay, this is not the way to pay for it.
Visa fees were already cripplingly high for many businesses, and much higher than our competitors, having already gone up nearly 500% over the past 10 years.
Soon UKVI visa application fees and visitor visas will rise by 15%. Fees for certificates of sponsorship will rise by £20%. But more outrageously, the Immigration Health Surcharge, which is a payment towards the NHS, will go up by an eye watering 66% – from £624 per year to £1,035 per year. The cumulative costs are staggering.
If the Government was really committed to making the UK the next Silicon Valley (as both Gove and Hunt claimed this week), it wouldn’t be doing this.
If you tax something more you get less of it. The Government is imposing a whacking burden on high-skilled workers and the businesses that need that talent to scale. We will all be poorer as a result.
Mastering Basics
This week Mastercard released Powering Small Businesses, the second report in its ‘Get Britain Growing’ series. There are seventeen recommendations, but I want to focus on one that I think is particularly important: “Don’t try to develop new programs from scratch, particularly if similar programmes or interventions are already available. Instead, actively seek out partnerships with relevant organisations that have been successful in supporting small businesses and help them scale their work.”
This is spot on. We really don’t need any more government-led interventions that crowd out the charitable and private sector. But that doesn’t mean the government can’t do good. Instead of trying to reinvent the wheel, the government can support existing interventions by supporting their evaluations.
It’s not a new idea. The Business Basic Fund supported projects that tested methods of encouraging small and medium-sized enterprises to boost their productivity through ways of working and technology. Money was made available to be shared between the successful proof of concept ideas and trials.
Doing so will build an evidence base for what works, and, just as importantly, what doesn’t. This is vital for the organisations delivering the interventions, as well as others considering future interventions.
Check out Strive UK to find out about their projects and support.
Looking Ahead
It’s worked well in the past, so I'm just sharing a few projects we’re considering, which you might want to input into. Get in touch if you have any thoughts on the following questions:
What can the government do better to help business owners realise their growth potential? For example, are there policy levers that would help business owners who would like to scale their business, but feel compelled to exit?
Is there anything to learn from the Corporate Venturing Scheme (CVS), which existed from 2000-2010?
How should we think about ecosystem building in Birmingham/the Midlands? What local knowledge should we be aware of?
What needs to change so the government collects better business data?
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