Today’s not-so-mini-Budget is a bet on economic growth. The scrapping of the planned increase in Corporation Tax and cutting of National Insurance and Income Tax will of course be broadly welcomed by businesses, but there’s quite a lot behind the headlines that should please entrepreneurs.

For example, from April 2023, companies will be able to raise up to £250,000 of Seed Enterprise Investment Scheme (SEIS) investment, the gross asset limit will be increased to £350,000, the age limit from 2 to 3 years, and the annual investor limit will be doubled to £200,000. This is something that we’ve been campaigning on for years – most recently in our Tech Startup Manifesto with Coadec. The government also hinted that they will extend the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT).

The government is also doubling the current limit to allow qualifying companies to issue up to £60,000 of CSOP options to employees, making the Annual Investment Allowance permanent and reforming the pensions regulatory charge cap. It’s a bit cringe when think tanks claim all the credit for policy changes, but at the very least I think it’s fair to say we’ve been in the vanguard of organisations pushing for these reforms.

The repeal of IR35 was huge news for those caught up in its web, and enterprise zones could be a big deal if they can offer something more than displacing economic activity. The Long-term Investment for Technology & Science (LIFTS) competition, which aims to “provide up to £500 million to support new funds designed by institutional investors and world-class fund managers” sounds intriguing (incidentally, we’ll be chatting to the British Business Bank about this policy, so let me know if you have any thoughts on how it can identify promising fund structures and vehicles).

While there’s a lot more to digest, these reforms alone aren’t enough to deliver the much-vaunted 2.5% growth. The Chancellor recognises this, but I’ll take this opportunity to remind him of three that we’ve identified as structurally critical.

First, as detailed in Strong Foundations, beyond the intergenerational scandal of only the wealthiest being able to get on the property ladder (nay, gilded escalator), the cost of housing and offices is holding back innovation by setting a limit on agglomeration. The Plan for Growth acknowledges that “further reform is needed”, but it’s impossible to understate how important this policy area is. It’s why we keep banging on about it.

Second, as we’ve said in multiple reports for the Female Founders Forum (FFF), the cost of childcare is locking mothers out of the workforce. Aria Babu has been a big campaigner on this – as were her predecessors Sophie Jarvis and Annabel Denham. Have a read of what Aria said to the Work and Pensions Committee for the most concise arguments we’ve been making. When she was Children’s Minister, Truss pushed for some of the policies we back, but she was blocked by people more senior than her in the coalition government. Today the Government says it “will bring forward reforms to improve access to affordable, flexible childcare.” Watch this space.

Third, we need to make the visa system work. While I could write for Britain (or any country) about all the necessary reforms, I’ll focus on the one that will make the biggest impact on growth. In True Potential we set out how to reform the newish High Potential Individual (HPI) visa so that we don’t miss out on the world’s smartest graduates. The Government should copy our formula, allowing graduates from approximately 100 universities spanning 13 different countries to access this innovative visa. Again, the Chancellor claims that “the government is committed to ensuring the immigration system works for business and encourages highly skilled people and high growth businesses to choose to locate and invest in the UK.” But is it committed enough?

We’ve heard this from too many previous governments – for 12 years it’s been from Conservatives. Talk is cheap, but any more of it without some action will come at a huge cost to the UK.

Hot Iron
This Government is actively looking for supply-side reforms and additional pro-growth measures like regulatory reforms and cuts – and they want them quickly. We will be feeding in our ideas that haven’t already been taken up (and those of others we wish we had come up with), but we’re always willing to hear more.

I can’t promise we’ll run with it, but we will take any suggestions you make seriously. Even if you think it’s too minor or niche to your industry to be worth suggesting, now is the time to share your thoughts. I look forward to hearing from you.