APPG for Entrepreneurship Digest: October 2023

Another year, another party conference season. In late September, the Liberal Democrats got the ball rolling with their bash in Bournemouth; last week the Conservatives mingled in Manchester while the Greens banded together in Brighton; the Labour Party has just finished living it up in Liverpool; and this Sunday the Scottish National Party will assemble in Aberdeen. Even if you haven’t attended one (or more) of the conferences, you’d be forgiven for feeling fatigued just for reading that. 

Beyond being an excuse to guzzle cheap alcohol, party conferences do – believe it or not – serve an altogether more functional purpose. They’re a chance for party bigwigs to set out their policy stalls and project whatever message it is they wish to give to the public. This is true for all of their annual gatherings, but especially so when Westminster is very much gearing up for an election at some point next year. (Spring?)

However much we may wish the case was otherwise, entrepreneurs will seldom be the first focus of politicians when they’re penning their keynote speeches or addressing fringe events. But even so, we’ve already heard a handful of things which could entail important consequences for the country’s startup community. 

Let’s start at the start, with the Liberal Democrats, whose conference was marked most obviously by an internal bust up over housing policy. The party’s high command was keen to scrap a policy to build 380,000 new homes each year – and instead aim to construct 150,000 social homes, in places determined by “independent assessments.” Not so fast, said groups like Liberal Reform and the Young Liberals, who successfully passed an amendment to “maintain [the party’s] commitment to a national housing target” and to “set a clear direction of travel and serious intent to address the housing crisis.” Why this matters to entrepreneurs should be clear to anyone who’s familiar with The Housing Theory of Everything. (And if you’re not, stop reading this, and start reading that. And then resume reading this.) 

As the party of government, more attention naturally focused on the Conservatives’ get together in the north. The location provided an apt/unfortunate (delete as appropriate) backdrop for one of Rishi Sunak’s main policy announcements – cancelling the Manchester-Birmingham leg of HS2, and promising to plough the money saved into extra funding for rail, buses and roads across the country instead. Reaction has been predictably mixed, with some seeing the move as an abandonment of the north, but others grateful for (on the face of things) a more geographically equitable spread of public spending. It’s often overlooked at how critical intracity – as opposed to intercity – connectivity is for businesses. As organisations such as The Entrepreneurs Network, the think tank I work for, have pointed out, many British cities are in effect far smaller than their European equivalents, simply because it takes so long to get into and around them. This renders their labour markets smaller and less flexible, which economists have known for centuries acts as a brake on productivity.

Meanwhile, one of the more telling things about the Conservatives’ conference was what was not said. The Chancellor remained tight lipped on the future of taxes, perhaps unsurprisingly given the Autumn Statement is due only next month. In a fringe event, Jeremy Hunt warned that with inflation still at historic highs, tax cuts would be “absolutely crazy.” However, when asked what he’d theoretically like to do if he had the fiscal headroom, Hunt replied that his: “first priority would be business tax cuts because the job of a Conservative government is to make the economy competitive.” Can we take that as something to look forward to in the near future?

Finally, as the party which currently looks most likely to lead the next government, a great deal of attention was also afforded to what the Labour Party had to say. Rachel Reeves, Hunt’s opposite number, used her keynote speech to explain how she would “get Britain building” if she moves into Number 11. In addition to hiring more planning officers, building regulations would be streamlined, to speed up the construction of new homes, as well as energy, digital, and transport infrastructure.

Also of note for entrepreneurs was what the Shadow Science Secretary, Peter Kyle, had to say about his party’s plans for bolstering innovation in the UK. He announced that, if elected, a Labour government would “create certainty with 10-year R&D budgets” as well as reforming the process of commercialising academic research, to increase the amount of spinouts British universities produce.

Adviser Update

The Entrepreneurs Network will publish its next Female Founders Forum report on 2 November – celebrating female entrepreneurs and highlighting the challenges they continue to face. Join them on the Terrace of the House of Lords to hear from Caroline Nokes MP, Chair of the Women and Equalities Select Committee. Find out about attending by clicking here. 

Next week, Enterprise Nation is launching its Tech Hub – a one-stop-shop solution for businesses to access industry-leading digital tools, training, support, and know-how. Find out about attending by clicking here. 

Both of the above organisations have been busy collaborating on research, too. Last month, they published the latest in their Access All Areas series – this time focusing on how to increase economic activity among older people. Read Access All Areas: Older workers in full by clicking here. Then, earlier this month, they published a short paper on simplifying the tax system for founders. Read Making Tax Simple in full by clicking here

In Parliament

The opportunities and risks of Artificial Intelligence continue to be a point of debate in Parliament. When informing the House of his parliamentary engagements, the Prime Minister highlighted that AI can “transform not just businesses and our productivity, but public services such as health and education.” However, he also emphasised the need for “guardrails” to address the risks of this novel technology. 

Michelle Donelan, Secretary of State for Science, Innovation and Technology, also submitted a written update to the Parliament on the Government’s AI initiatives. She said that the Frontier AI Taskforce, which will be evaluating risks, recruited its external advisory board and has been developing partnerships with leading AI organisations. Donelan also reminded Parliament about the upcoming AI Safety Summit the UK will host on 1-2 November at Bletchley Park, where international governmental representatives and leading AI institutions will meet. 

The Secretary of State touched upon the Government’s efforts to create an AI regulatory framework as well, announcing that her department “established a central AI risk function, which will identify, measure and monitor existing and emerging AI risks.” However, for now, the Department will work with existing regulators rather than establishing a separate body: “Many [regulatory bodies] have started to proactively and independently take action in line with our proposed AI framework, including the Competition and Markets Authority, which published a report on its initial review of AI foundation models; the Medicines and Healthcare products Regulatory Agency, which has published a road map for software and AI as a medical device; and the Office for Nuclear Regulation, which is piloting an independent sandbox for the use of AI in the nuclear sector, with support from the regulators’ pioneer fund.”

Another area of interest continues to be facilitating innovation in sustainable energy. Dr Jamie Wallis, Conservative MP for Bridgend, proposed in Parliament that “consumers who own shares in off-site renewable power production should be granted an exemption from the levies.” He highlighted that “such a step could potentially reduce their bills by a remarkable 44%” and that it “would create a compelling incentive for consumers to invest in their own source of green power, unlocking a new wave of personal private ownership of UK infrastructure.” Wallis argued that such a move could enhance innovation and create jobs, “as more and more consumers invest in green energy ownership, the demand for renewable energy technologies will soar.”

In a separate debate on farming and net zero, Lord Benyon highlighted that the Department for Environment, Food and Rural Affairs “is assisting farmers through our £270 million Farm Innovation Fund, including £15 million to assist farmers in putting solar panels on their barns.” However, he also argued that more can be done to enhance innovation in the sustainable agriculture sector and emphasised the need to encourage young people to get involved in farming: “They need to feel that they are assisted by government and the agricultural education sector, and that there are grants available to help them work together to use innovations that reduce their carbon footprint but also help with their bottom line.”

Claire Coutinho, Secretary of State for Energy Security and Net Zero, also highlighted separately that the Government is keen to spur innovation in hydrogen, carbon capture, and other emerging green technologies.