Want to ensure Britain’s future prosperity? Stop taking wealth creators for granted
Last month, the UK reported record numbers of people in employment.
With all the Brexit noise, it was easy to miss this incredible news.
But a healthy jobs market is of critical importance to society. As a barometer of success, employment is for some (including me) more important than any other figure, including GDP.
And the people who have broken these employment records, who have made this happen, are not politicians, but business founders and wealth generators.
Most private sector jobs come originally from the spark of an idea and the hard work of people with the drive to start and grow their own business. The most successful go on become part of the so-called “one per cent” (those earning above £162,000), who between them pay 27 per cent of all UK income tax.
We used to appreciate such people. Since the 1980s, successive governments have fostered a supportive, business friendly environment with low taxes and easy access to foreign capital.
As a result, the UK has come to be viewed as a haven of entrepreneurship. Successes like Deliveroo, which recently attracted $575m investment from Amazon, exemplify a world-beating entrepreneurial culture that continues to attract the brightest and best.
Now, we risk throwing it all away.
A no-deal scenario would be potentially hugely disruptive for the UK’s growth businesses, especially those reliant on supplies and labour from the EU. Startups seeking to take their businesses to the next level could well face tariffs, supply chain disruption, and real uncertainty about where future investment will come from.
The business builders we speak to are not buying the “it will be alright on the night” rhetoric, or the argument that lower corporation tax will be a panacea for the no-deal pain.
Meanwhile, the possibility of high taxes for the one per cent under a far-left Labour government could cause wealth creators to leave and reduce investment in the UK
We know from our own research that creating jobs is one of the top motivating factors for business builders on the path to success. Wouldn’t it be great if our politicians focused on helping them?
Perhaps each of the main political parties could make clear in their manifestos how they propose to create the right conditions for wealth creators? Top of the list should be how they will attract talented people from overseas who wish to use the UK as the launchpad for their new enterprise.
Lowering corporation tax is one option, but we also need specific measures to help smaller companies on a growth trajectory. Last month, Michael Gove discussed the possibility of offering small businesses “holidays” from VAT and National Insurance contributions. Inventive measures like this would help, as would the relaxation of SME lending criteria.
Whatever happens with Brexit, the UK must not lose its status as one of the best places to do business.
As they contemplate record employment figures, politicians should consider that the future prosperity of the nation will be greatly influenced by a relatively small number of highly driven entrepreneurial souls – many of whom are in the often maligned top one per cent.
Main image credit: Getty