This week we launched our United Growth report in partnership with Sumer. Based on a survey of entrepreneurs across every region of the UK, we got into the nitty-gritty of the challenges they face, their expectations about the future and their views on different policies that could make their lives easier.
As many of you will be acutely aware, it’s tough out there. By a ratio of more than six to one, business owners agree that economic inequality between the regions of the UK is a problem. And more agree than disagree that they’ve come close to closing in the previous six months. Nearly two in five are currently considering closing up.
With the Budget just around the corner, the Government will no doubt be interested to know that entrepreneurs feel that the tax burden is the single biggest obstacle holding back growth. Things could get worse.
On this, we know that the thousands of entrepreneurs in our network are worried about mooted changes to Capital Gains Tax (CGT). As our Research Director Eamonn Ives argues for CapX: “Though there is a logic to bringing rates of CGT and income tax closer together, nobody doubts that this would have harmful economic consequences – not least lowering the expected return to investment or company growth. If CGT is to rise, we urge the Chancellor to accompany such a move with paring measures such as base reform and targeted carve outs to ensure that genuine entrepreneurship does not get overly penalised in the process.”
The report was launched in our home away from home: the Cholmondeley Room in the House of Lords. After last week’s Labour-led launch, with Jonathan Reynolds and Lord McNicol, this week we crossed the floor of the House to host the Business Secretary’s opposite number, Kevin Hollinrake MP, and the Liberal Democrat MP Victoria Collins, a new Member who, like Kevin, used to be an entrepreneur. As I wrote for Forbes, concern over tax changes were echoed by Kevin, while Victoria expressed particular support for the calls in the report around extending devolution, which called for the granting ‘London-style’ powers to all metro mayors.
Victoria also backed the report’s call for business rates reform – suggesting a commercial landowner levy as an alternative – which aligns with the report’s recommendation for the adoption to tax in proportion to the value of the underlying land that premises sit on. This is an idea inspired by Andrew Dixon, one of our Advisers, who in 2018 commissioned a team to draw up a land value tax to reform business rates and support the struggling high street.
I expect you’ll be hearing a lot more from Sumer as they scale in their efforts to support small businesses. Read City A.M. recent profile of its founder Warren Mead to find out more.
What the Big Idea?
If you’re not already doing so, do give us a follow on Substack. This week we published our first Three Big Ideas, a new series where Eamonn, Anastasia and I share our thoughts on ideas that have captured our attention. The first covers self-driving cars, AI art, and measuring immigrant entrepreneurship. On the topic of visas, Eamonn has written the second deepdive into our Job Creators 2024 report, which is also on our Substack.
More Immigration?
There are few policy areas with as much chopping and changing as visa rules. Consultation after consultation, tweak after tweak, it’s beyond the wit of any business owner to keep on top of it.
I’m no expert, but I can’t tell you how many times I’ve given an overview of the visa routes open to perplexed entrepreneurs and their (wannabee) employees – before passing on to someone qualified to give legal advice. In a few weeks, we’ll be hosting an actual expert: Dr Madeleine Sumption, Director of the Migration Observatory at the University of Oxford and Member of the influential Migration Advisory Committee.
If you want to see things nudged in the right direction – come along to support us.