Policies outlined in the Queen’s Speech show that the government is pursuing a pro-growth agenda to aid the recovery after the pandemic but there are a number of measures which do not go far enough or may impede the good work elsewhere.
On the ARIA Bill and R&D Funding, Sam Dumitriu, Research Director at The Entrepreneurs Network, says:
More cash for R&D is key to helping the UK’s startup sector continue to grow and new models of funding such as ARIA are worth trying. But to meet the UK’s 2.4% of GDP commitment, private sector R&D spending needs to increase too. The government cannot afford to delay long-overdue reforms to R&D Tax Credits. It needs to be simpler for startups and cover all the inputs in the 21st century R&D process, such as data and cloud computing.
On the new measures to change subsidy rules post-Brexit, Sam Dumitriu, Research Director at The Entrepreneurs Network, says:
New businesses are the number one driver of job growth, which explains why there are so many different schemes and tax breaks designed to support them. Outside the EU, there are opportunities for simplification making it easier for businesses to access private capital. It is clear why the government is keen to increase subsidies to areas of strategic interest and left-behind areas but they must be careful about what they do with this new-found freedom. We must not use it to burn tax-payer money to favour well-connected winners and subsidise businesses which would have never been profitable independently.
On the changes to make procurement more accessible for SMEs, Sam Dumitriu, Research Director at The Entrepreneurs Network, says:
It is welcome that the Government is trying to simplify the procurement process for SMEs. Too often, large companies with dedicated public sector teams win out because they are better able to navigate the labyrinthine bidding rules. But complexity isn’t the only issue. For small businesses, every activity has a major opportunity cost. Most SMEs cannot devote dedicated resources to scouring multiple outlets in search of public procurement opportunities, so it’s vital that bids are advertised in a timely manner on a single platform.
On the potential changes to the planning system, Aria Babu, Senior Researcher at The Entrepreneurs Network, says:
High housing and office costs are among the biggest challenges facing the UK. Start ups have their costs driven up by office rents and they struggle to hire the brightest and most creative people because of the cost of living in the most dynamic and innovative places. Estimates for how much growth we are missing out on by allowing these problems to continue go as high as 30% of GDP. A more liberal planning system is necessary if we want the UK cities to remain hives of entrepreneurial dynamism. We have not seen the text of the new Planning Bill but anything that falls short of fixing the underlying issues will not go far enough.
On the measures to make the internet safer, Sam Dumitriu, Research Director at The Entrepreneurs Network, says:
Measures to tackle online harms need to be carefully designed. Everyone wants a safe and secure internet, but there’s a risk that ill-thought-out rules and regulations will crush competition. Startups with the power to disrupt the tech giants can’t afford to employ armies of moderators and lawyers. Well-intentioned policy could end up entrenching monopolies. This wouldn’t be the first incident. When the EU passed GDPR, the share of advertising spend going through Google and Facebook actually increased.
Sam Dumitriu, Research Director at The Entrepreneurs Network says:
“By increasing R&D funding through ARIA, pledging to install 5G and gigabit broadband, and planning reform it is clear that the government is keen to pursue growth to recover from the pandemic. However, there are some places where competing agendas may damage these good intentions. Changes to subsidy rules post-Brexit could result in the government wasting money propping up unviable but politically popular businesses.”
-ENDS-
Notes:
For further comments or to arrange an interview, please contact:
Aria Babu
aria@tenentrepreneurs.org / 07834549299
The Entrepreneurs Network is a think tank for the ambitious owners of Britain’s fastest growing businesses and aspirational entrepreneurs.