Minutes from the AGM for APPG for Entrepreneurship 2024

Date: 15th May 2024

Present: Seema Malhotra MP, Jo Gideon MP, Lord Leigh, Virendra Sharma MP, Bill Esterson MP, Gareth Thomas MP, Flick Drummond MP, Yvonne Forvague MP, Gill Furniss MP, Paul Scully MP, Philip Salter (The Entrepreneurs Network), Katrina Sale (APPG for Entrepreneurship).

Elections:

Seema Malhotra MP was re-elected as Chair and Registered Contact for the APPG.

Lord Bilimoria was re-elected as Vice-Chair.

Lord Leigh of Hurley was re-elected as Vice-Chair.

Jo Gideon MP was re-elected as an Vice-Chair.

The following Parliamentarians kindly support the APPG as Members:

Ian Liddell-Grainger MP

Catherine West MP

Bob Blackman MP

Fiona Bruce MP

James Daly MP

Katherine Fletcher MP

Nick Fletcher MP

Dr Rupa Huq MP

Dean Russell MP

Craig Williams MP

Baroness Donaghy

Baroness Kingsmill

Baroness Wolf

The Earl of Erroll

Lord Luce

Lord Aberdare

Lord Lucas

Bim Afolami MP

Saqib Bhatti MP

Selaine Saxby MP

Bill Esterson MP

Gagan Mohindra MP

Baroness Kramer

Baroness Neville-Jones

Anna Firth MP

Ruth Cadbury MP

Ben Bradley MP

Virendra Sharma MP

Brendan Clarke-Smith MP

Paul Howell MP

Paul Scully MP

The Lord Bishop of Southwell and Nottingham

The Secretariat produced an Income and Expenditure statement for 2023 - 2024.

APPG for Entrepreneurship Digest: May 2024

May began with local elections taking place across England and Wales. The futures of a few thousand councillors, 37 police and crime commissioners, 25 London Assembly Members and ten directly-elected mayors hinged on where voters were putting their little crosses. In this month’s digest, I want to focus on that last group of politicians – mayors – and their importance to economic growth and the country’s entrepreneurs. 

Before beginning, a quick primer. England now has eleven metro mayors, plus the Mayor of London – which for boring legal reasons is not technically a metro mayor, but in practice basically is. Different mayoralties have different powers, but all have responsibility for at least some aspects of transport policy and adult education; most take a role in housing and planning; and some have varying degrees of fiscal powers such as business rates retention.   

As well as serving around half the population of England, they also represent half the number of jobs in the economy, and even more than half (54%) of the country’s entire economic output. While it’d be wrong to ascribe all of that value creation to the individual mayors in question, it’s clear that the decisions they take will have profound consequences for how easy – or difficult – it is for businesses to thrive in their localities.  

We can see this most tangibly in areas like transport and planning policy. On issues like these, mayors have the means to make a noticeable impact – whether it’s franchising buses or extending tram networks, or reviewing local plans to enable the development of more new homes. As was noted in The Entrepreneurs Network’s latest report Building Blocks, Britain’s cities tend to punch below their weight compared to their European neighbours, and weak agglomerative forces caused by inadequate transport infrastructure and lack of housing supply doubtlessly explain much of this. By placing more responsibility for these policy areas in the hands of those closer to the reality of them, it stands to reason that better outcomes will ensue – or so a devolutionist would argue. (Certainly, it’s what our APPG chair Seema Malhotra thinks, as she told a recent interview with FE Week.)

As well as being able to pull on policy levers, perhaps one of the most important aspects of a metro mayor’s job is acting as a cheerleader for their region – both nationally and internationally. Since being elected, Sadiq Khan has repeated the phrase ‘London is open’ almost ad nauseum, in a bid to catalyse investment and attract tourists through uncertain times; during the Covid-19 pandemic, Andy Burnham was nicknamed ‘King of the North’ for campaigning for Greater Manchester to receive more support and attention from Whitehall; and while he was Mayor for the West Midlands, Andy Street was a vocal proponent for HS2, even as others in his party called for it to be scrapped. 

Given the near infinite number of variables and possible counterfactuals to consider, it’s nigh on impossible to calculate the economic impact of metro mayors. But there are strong grounds to believe it’s positive – research from the OECD suggests that cities with fragmented governance structures have productivity levels that are up to 6% lower than those that do not, while polling data from the think tank Centre for Cities shows that people living under a metro mayor support further powers being devolved down from central government (surely an indication that they think the arrangement is working well). 

Looking ahead, what might be the next step for metro mayors? An obvious place to start would be to level up the range of powers that each authority is currently afforded. As noted earlier, some mayors have responsibilities for some policy areas, while others do not. The Institute for Government recently said that: “The powers devolved are in many cases inadequate. The funding system is fragmented and short-termist. Insufficient attention has been paid to the capacity and structure of combined authorities. And the constitutional status of English devolution is uncertain.” Granting each mayoralty equal standing would be a quick and easy way to distribute more powers away from Whitehall.

Beyond that, further thought could be given to expanding what powers are available to even the most devolved mayors. Taxing and spending stands out as particularly good examples. The UK is an outlier when it comes to fiscal centralisation – with only 5% of taxes in the UK being collected by local government, well below the OECD average of 11% for non-federal countries. Tying the economic fortunes of businesses closer to mayors would, in theory, give the latter more of a stake in their success, and an incentive therefore to give them what they need. NIMBYist tendencies could be quelled if local politicians can capture more of the upside of pro-business development, rather than just the downsides as the case is currently. 

Of course, political devolution is not universally liked. And just as mayors are capable of making good decisions, so too are they capable of making bad ones. As Will Brett-Harding of the What Works Centre points out: “increased discretion over spending for local government raises questions about who will evaluate policy, and how.” Mechanisms are built into devolution deals to ensure mayors can be effectively scrutinised, but consideration of how to further boost transparency and accountability can hardly be a bad thing. 

As for now, however, the evidence suggests that metro mayors are a broadly popular turn in British politics. With a little fine tuning, there’s every reason to think that they can deliver even more for entrepreneurs up and down our country.

Adviser Update

Our Secretariat, The Entrepreneurs Network is hosting a meetup with Growth Hub Global and LSE IDEAS on 21 May. This event will focus specifically on international policy issues with an informal gathering over drinks – including non-alcoholic options – and nibbles. Learn more by clicking here.

On 22 May they are also hosting an event in Parliament with MDRx, discussing how a Labour government would build trust in AI through regulation without curbing innovation, and how this novel technology can be used to enhance public services. Learn more by clicking here.

And finally, they are convening two dinners with Britain Remade, aimed at learning more from entrepreneurs who have faced challenges to do with the planning system. One will take place on 30 May, and the other on 19 June.

Enterprise Nation is partnering with Google to convene a series of digital skills events. Their Digital Garage workshops are designed to help you grow your business online and find new customers. Learn more by clicking here.

On 19 June the Enterprise Research Centre (ERC) will be at the Shard in London to host their 9th annual Small Business Britain conference. The day will include a mix of insights from ERC research as well as discussion with a range of academic, business and policy speakers and examples of good practice in business support. Learn more by clicking here.

In Parliament

Business and Trade Secretary Kemi Badenoch gave a statement to the House on the UK’s latest trade statistics. She declared: “The value of UK exports was £862 billion in the 12 months to February 2024. That builds on progress we have made in growing our exports outside the confines of the EU. Exports are now 2% above 2018 when adjusted for inflation. Services exports are at an all-time high.” Replying was Shadow Minister for International Trade Gareth Thomas, who said: “British exports in the past decade have grown slower than those of any other member of the G7 besides Japan. According to the Office for Budget Responsibility, since the Secretary of State was appointed, British exports have dropped and are expected to decline again this year, with at best anaemic growth in each of the next three years. Ministers have cut funding to help small businesses get to the international trade shows that they need to attend in order to find new export markets, and have cut funding to allow business groups to lead their own trade missions to win vital new orders for British business.”

Sammy Wilson asked the Chancellor whether he realises: “that the tax burden he is imposing on small and medium-sized businesses is crushing this economy?” In response, Jeremy Hunt said: “We are doing everything we can to support small businesses. Businesses like the one that the right hon. Gentleman mentions have received, for two years in a row, a 75% discount on their business rates. That is a massive leg up for businesses recovering from the pandemic. We have also made sure that any increases in corporation tax apply only to larger businesses.”

Pauline Latham questioned what the Government is doing “to help businesses in [her] constituency that have difficulties because [they] do not have the skills to increase the business.” Small Business Minister Kevin Hollinrake responded, saying: “We are putting £3.8 billion into skills training for people who work for businesses, which is important. We are also improving skills for entrepreneurs and business owners through our help to grow management programme – it can be found on the help to grow webpage – a 12-week mini-MBA, which is 90% funded by the Government. We also have “Help to Grow: Management Essentials”, which offers two hours of totally free online training for aspirant new business owners.”

Also on the topic of skills, Lisa Cameron told the House that: “The UK already has a strong track record as a leader, and we want to maintain that leadership and be at the helm of this transformation. We want to be seen as a destination for innovation and businesses that want to start up and scale up across the United Kingdom. We also have to level up. I hear a lot in my role about businesses starting up in London, and that is absolutely fantastic, but that has to be levelled up to give people opportunities right across the UK. The UK boasts some of the most respected universities, and the largest financial services sector and tech ecosystem in Europe. In 2023, the UK tech sector reached a combined market valuation of more than £1 trillion. Focusing on education and boosting digital skills will therefore be central to the success of the Government’s vision and will ensure that people have the skills they need to pursue careers in digital economy transformation. To turn that vision into reality and make the UK a digital and technology superpower, we must not only attract the right talent but build the talent base here through teaching and training in every sector and maximising our talent pipelines.”

Chair of the Treasury Select Committee Harriett Baldwin announced the publication of their latest inquiry, on SME finance. She said: “As every Member will know, small and medium-sized enterprises form the backbone of the UK economy. All of us in our constituencies will be aware of amazing small and medium-sized businesses. In fact, 99% of the businesses in this country are small and medium-sized, which gives us an idea of how important they are. Well over half of our constituents who are employed work for SMEs. Access to finance for small and medium-sized businesses, which the Committee has been looking at, is therefore a really important issue. I want to highlight some of the points raised in our report.”

Over in the House of Lords, meanwhile, Lord Birt told colleagues that: “The economy is highly dynamic, constantly reinventing itself and demanding new skills and abilities. Society too is dynamic, constantly evolving, and embracing social and cultural shifts. It is not clear, however, that our education, skills, health and welfare systems are acting in step and that they are sufficiently dynamic and innovative to keep abreast of and respond to these ever-changing needs of both individuals and the economy. These issues are deep, stubborn and challenging and, as a nation, we need to step back and consider in the round how best to address them.”

In a debate on startups and tax incentives, the Earl of Effingham said: “one of the main sources of capital for [startups] in the past – the UK’s Small Cap stock index – is shrinking as firms list overseas or go with private equity. So I ask my noble friend the Minister: what are the Government doing to reinvigorate the Small Cap index, help our start-ups and keep them here?” In response, Baroness Vere said: “London remains one of the leading financial centres in the world. The Government are incredibly focused on our domestic equity markets to ensure that they meet our ambitions of ensuring we have capital available to small companies. My noble friend will know that the noble Lord, Lord Hill, did a review into UK listings and we are taking forward his recommendations. My noble friend will also know that the Government are proceeding through looking at all our regulation to ensure that it is fit for purpose for the UK and UK listings under the smarter regulatory framework. He will also have seen the reforms announced by the Chancellor in Edinburgh and at Mansion House. We are seized of the opportunity we have with domestic equity markets, whether they be for large cap or small cap companies. However, we recognise that there are things we can do to make them better.”

APPG for Entrepreneurship Digest: April 2024

Most entrepreneurs intuitively appreciate the importance of branding. Being able to establish a strong sense of what their business or product ‘means’ can be crucial for standing out from the competition, and enabling them to attract and retain customers. By investing in an identity, what businesses are effectively doing is creating mental shortcuts for people to take so they feel more confident to part with their money – there’s a reason why financial institutions typically opt for sober fonts and colours, while fast food chains tend to go for an altogether more fun approach. 

If we accept that branding matters for businesses, should we then also necessarily accept that the same applies for entire countries? The fact that over recent years numerous different nations have undertaken campaigns to promote themselves as good locations in which to do business is perhaps one piece of evidence that we should. Anyone who’s ever landed at a British airport will surely have seen posters for the GREAT Britain and Northern Ireland campaign adorning the corridors, and similar strategies can be seen elsewhere too. If such initiatives didn’t do much good, it stands to reason that they’d have fallen out of favour by now. 

On the other hand, a more sceptical reader might note that even ineffectual policies can stick around long past their sell by date. Without the brutal but powerful evaluating mechanism that is profit and loss, it can be much harder to quantify the precise usefulness of government schemes. Indeed, Simon Anholt, a former advertising executive and the man credited with creating the very concept of ‘nation branding’, is less than persuaded about the efficacy of attempts to retail whole economies. In an interview with the BBC, he pulled no punches: “I have been looking for 20 years for a single properly documented case study of one single country, city or region that has demonstrably moved the needle, even by the most microscopic degree, on its global image as a result of marketing, messaging or communications. And I’m still looking.” 

Personally speaking, I broadly share Anholt’s hesitancy. Or, at least, I imagine that there are bigger forces at play. Call me dubious, but I’m not sure an ad campaign, however well crafted, is going to regularly and reliably swing decisions to strike multi-million pound deals one way or the other, or determine where a founder starts their business. 

That being said,  I don’t think this makes the idea that a nation’s ‘brand’ is totally irrelevant. Whether we like it or not, countries do have reputations, identities, vibes – whatever you want to call it. Estonia is known for its world-leading approach to digital government; Singapore for its light touch regulatory environment; the US as a place to hoover up VC cash; the UAE for its low taxes. Even if a country isn’t regarded as having an especially thriving economy, it might be known for enjoying a high quality of life, and somewhere appealing for entrepreneurs to live. (Of course, brands can also be negative – perhaps onerous compliance processes, a weak skills base, or poor infrastructure – but for the sake of politeness, I’ll not name any specific names here). 

What’s important to note though, is that those commonly held perceptions of countries are generally well-founded, and the result of deliberate policy choices. It’s then off the back of those policies, I’d wager, that you can build a genuinely effective marketing strategy, or, perhaps more powerfully, rely on word of mouth of the entrepreneur community. Give them something to talk about and the likelihood is that they will.

Markets aren’t dumb, and at the level of a national economy you can’t just hope to fake it ‘til you make it. If a country wishes to be known as a great place to start and grow a business, it helps if it’s a great place to start and grow a business. For that to be true, judicious policy making across a range of areas is prerequisite – and to that end, we’ll continue to do what we can to ensure that those policies are at the forefront of legislators’ minds. 

On 30 April, The Entrepreneurs Network, Secretariat of the APPG for Entrepreneurship, is holding a focused roundtable on how the government can do a better job of branding the UK as the best place in the world to scale a business. If you’ve got expertise to share, get in touch by clicking here.

Adviser Update

The Entrepreneurs Network and Enterprise Nation are holding a joint dinner in Parliament with the Minister for Exports Lord Offord on how to help SMEs sell abroad. Learn more by clicking here.

On 15-16 April, Innovate Finance hold their Global Summit at the Guildhall in the City of London. Learn more by clicking here. 

Between 23-25 April, it’s UK Tech Week – a new initiative that aims to showcase the tech innovation, expertise, and talent that exists across the nation and to champion the vibrant technological ecosystem that spans the UK. Learn more by clicking here.

On 20 May, the Enterprise Research Centre is holding a free event at the Shard in partnership with Propel Hub on the theme of workplace mental health, wellbeing and productivity. It will bring together researchers, people managers and business, policy and healthcare stakeholders to share cutting-edge evidence on. Learn more by clicking here.

The EISA Awards – which celebrate the outstanding achievements of participants in the EIS and SEIS ecosystem – are open for nominations for 2024. Learn more by clicking here. 

Applications also opened for UKBAA, Type One Ventures and the UK Space Agency’s Venture into Space programme – that seeks to identify businesses developing revolutionary technologies, guiding them through carefully curated activity, providing them with industry expertise, mentorship and connections in order to strengthen their propositions and ultimately enabling them to raise capital. Learn more by clicking here.

In Parliament

Business Minister Kevin Hollinrake MP gave a Written Statement on Simpler Corporate Reporting. In it, he notes that legislation will be laid: “to lift the monetary thresholds that determine company size by 50%, in order to take account of inflation and to reduce burdens on smaller businesses,” and that “the effect of these changes is that 5,000 large companies would be reclassified as medium-sized and access more proportionate reporting; 13,000 medium-sized companies would be reclassified as small companies, enabling them to benefit from exemptions to statutory audit requirements as well as the ability to file simpler accounts; and 113,000 small companies would be reclassified as micro-sized companies, which will allow them to file simpler accounts—a benefit for more than one in every four businesses that are currently classified as small.”

While discussing the topic of business investment, Andrew Gwynne MP declared: “the actual record of this Government over the past 14 years is abysmal. It is a fact that business investment has been consistently among the lowest in both the OECD and the G7,” before asking why “the Office for Budget Responsibility is forecasting a further 5% fall this year.” In response, the Exchequer Secretary to the Treasury, Gareth Davies MP said: “Announcements in each of our last three fiscal events have enhanced our business investment environment for international investors: we have the second highest foreign direct investment stock in the world; we have some of the best universities in the world, which are attracting businesses; we have announced full expensing, which is a £10 billion-a-year tax cut; we have the lowest corporation tax in the G7; and we are reforming our energy grid, bringing investment into our net zero ambitions. We are reforming our systems, reducing our taxes, and encouraging investment.”

In a debate on the Artificial Intelligence (Regulation) Bill in the House of Lords, Baroness Stowell said: “On its own, a concentration on [AI] safety will not deliver the broader capabilities and commercial heft that the UK needs to shape international norms. However, we cannot keep up with international competitors without more focus on supporting commercial opportunities and academic excellence. A rebalance in government strategy and a more positive vision is therefore needed. The Government should improve access to computing power, increase support for digital, and do more to help start-ups grow out of university research.”

A Lords debate on last month’s Spring Budget saw Baroness Bowles make the case for improving procurement processes: “It is far easier for a department to procure a large consultant than it is to procure a young technology business. Barriers include fear or lack of willingness to trial a new technology, concern about becoming stuck with the new technology provider, and fear that the technology not working will be seen as a failure. The fact that departments already end up stuck with the usual suspects, plus failures, via the usual consultants, seems not to feature.

APPG for Entrepreneurship Digest: March 2024

A week has elapsed since the Chancellor stood up to give the Spring Budget, and the dust has, just about, settled. In this month’s newsletter, we’ll delve into some of the key announcements it made for Britain’s founders, and consider how they’ve gone down in the wider entrepreneurial community. 

Looking at the Budget in the round, one thing that many seem to agree on is that it was a somewhat sedate affair. But as The Entrepreneurs Network (usual disclosure: the APPG’s Secretariat, and the think tank I work for) said in its reaction: “We can’t have it both ways. We’ve all complained about governments too readily chopping and changing policies, and then a rather boring Budget comes along and suddenly we’re all asking: is that it?” 

And indeed, last Wednesday still gave plenty for us to sink our teeth into. One of the easier, and more well-briefed, announcements that the Chancellor made was with respect to the definition of High-Net-Worth Individuals. After hiking the qualifying income threshold from £100,000 to £170,000 at the end of January, a backlash ensued from entrepreneurs and investors alike – not least those from underrepresented groups. Jeremy Hunt confirmed that legislation would be brought forward to reinstate the previous eligibility criteria, and declared that “further work to review the scope of the exemptions” would be carried out. 

Talking of thresholds, another which was subject to change was the VAT Registration threshold. This had previously been set at £85,000, and the Spring Budget saw it increase to £90,000. On the face of things, this was a good piece of news for small businesses, who’ll have some extra breathing room (the FSB were certainly happy). 

But it wasn’t met with universal approval. In recent years, increasing attention has been paid to the idea that the threshold actually holds back business growth, by incentivising small firms and sole traders to limit their turnovers to ensure they remain just below the threshold. (Tax expert Dan Neidle explains the situation far better than I could ever hope to.)

Another prominent plank of the Budget – accompanied by a hefty document of its own – centred on what more can be done to deliver better bang for the taxpayer’s buck. The Chancellor said that the Government will be taking the “next steps” of its Public Sector Productivity Plan, and to that end mapped out new funding streams for tech upgrades and digitisation. As Enterprise Nation’s Emma Jones noted in her Budget response, “increasing Government spending with small businesses and procuring the goods and services of SMEs has the power to take the best of British innovation and accelerate it.”

In order to develop those innovations, we need to harness the best of the research being carried out in our universities. It would seem Hunt agrees – as he built on previous efforts to catalyse spinouts (startups which commercialise academics’ work). “The government has asked universities to report on their spin-out policies by the end of May,” the Budget notes, “and has also begun consulting on the design of the new £20 million proof-of-concept fund to support universities and future founders to de-risk technology, and on a pilot approach to supporting the establishment by universities of shared Technology Transfer Offices.”  

As well as all of the above, the Spring Budget also saw the Government announce a consultation on a UK ISA, an update on Investment Zones, the publication of the ‘Case for Cambridge’ and a ‘Vision for Leeds’, and changes to the taxation of non-doms. 

By their nature, founders clamour for change, and that includes changes in policy. And while things might not always change on the timescales they’d like, we’ll always continue to make sure their voices are heard right at the heart of Parliament.

Adviser Update

The Entrepreneurs Network published their latest research, looking at the intersection of neurodiversity and entrepreneurship. Read it in full by clicking here.

They are also celebrating their tenth anniversary next week with an afternoon tea reception in the House of Lords. Find out more by clicking here.

With the UK Day One Project, they will also be holding a policy salon on high-skilled immigration. Find out more by clicking here.

Enterprise Nation published a report on what small businesses think and feel about artificial intelligence. Read it in full by clicking here.

A final analysis of the Business Basics Programme, conducted by Nesta’s Innovation Growth Lab, was published by the Government. Read it in full by clicking here.

In Parliament

In Business Questions, the Shadow Minister for Investment and Small Business, Rushanara Ali, asked: “What specifically will the Small Business Council do, and what will Ministers do to halt the alarming trend of more businesses closing than opening?” In response, the Minister for Small Business, Kevin Hollinrake highlighted work on improving access to finance, including “£1 billion of Start Up loans having been made to 100,000 businesses.”

Noting that it is “known around the world as a start-up nation thanks to its extraordinary tech sector,” Nicola Richards asked the Business and Trade Secretary what steps she is taking to advance negotiations on a bespoke free trade agreement with Israel. In reply, Kemi Badenoch said: “My hon. Friend will be pleased to know that we held a virtual negotiating round with Israel in February, focused primarily on services. That is one of the things that we are doing to move the FTA forward, and we will update Parliament shortly in the usual way via a written ministerial statement.”

Barry Shearman asked the Science, Innovation and Technology Secretary: “Whether she has had discussions with Cabinet colleagues on encouraging co-operation between universities and businesses to promote innovation.” In response, Michelle Donelan said: “Of course, I speak to colleagues on this important topic all the time. Our science and technology framework is designed to ensure that we do not just challenge university rankings, but translate them into material benefits for the United Kingdom. My Department has a number of programmes breaking down the barriers between universities and businesses, which have contributed to the nearly 90,000 interactions reported between universities and businesses in 2021-22. That is a 5% increase on the previous year.”

In a Written Statement, Science Minister Andrew Griffith announced the Space Industrial Plan, which he claimed: “Sends a strong demand signal to, and provides clarity for, UK space companies and investors, giving them the confidence to invest long term in the sector.” He added that: “We have heard and understood the challenges facing UK space companies, and we want the world’s space entrepreneurs and innovators to come to the UK because it offers the best possible place to make their visions happen.”

In a House of Lords debate on Higher Education, Lord Storey remarked: “The impact of research carried out in our universities is not limited to the grandest history-shaping excellences. For every history-shaping innovation, there will be millions of attempts by dedicated students and individuals contributing each day to moving the frontier of knowledge one step ahead. These are the students and people we need to support as, without them, there would be no innovation.” 

In the same debate, Lord Johnson said: “As the World Economic Forum’s Future of Jobs report found in its survey of employers, 44% of workers’ skills are likely to be disrupted over the course of the next five years. It is only the quality of our education system that will determine whether the UK will benefit from these innovations and whether it will be able to join the ranks of countries developing the next technologies. The most highly innovative knowledge economies around the world – look at South Korea, Israel, Japan and Canada –have boosted tertiary participation rates to well above ours, to the order of 60%, 70% or even more. Our ambition should be to join this vanguard of knowledge economies, not to give in to the dismal voices calling for student number controls that will hold back our productivity, widen inequality and throw sand into the engines of social mobility.”

APPG for Entrepreneurship Digest: February 2024

Spend almost any amount of time with a bunch of founders and it’s easy to appreciate why you often hear the phrase “entrepreneurship is contagious” being bandied around. People who create companies – on the whole – seem to be an inherently enthusiastic and encouraging breed. Even just a few conversations with one can be enough to leave you pondering whether to start a business of your own.  

What’s more, this idea is far from pure conjecture. A growing body of research suggests that exposure to founders really does increase the likelihood of someone going into entrepreneurship themselves. Just last week, The Entrepreneurs Network published their (full disclosure: my) latest report, Entrepreneurs Unwrapped, which was based on a wide-ranging survey of both founders and people who’ve never launched a business before. 

From it, we can see differences and similarities between the two groups. For instance, when asked whether they knew someone when growing up who owned a business, 71% of current entrepreneurs responded yes, while only 41% of those who haven’t started a venture yet said the same. 

Moreover, knowing a business owner seems to positively impact views of entrepreneurship. Among non-founders who reported knowing one while growing up, many more (47%) than not (10%) said that it has positively influenced their views on entrepreneurship. Entrepreneurs who reported knowing a business owner when growing up felt similarly, only to an even greater extent – with 85% saying that it positively affected their views on entrepreneurship, compared to just 3% who thought it negatively impacted them.

As I say, this is hardly the first piece of evidence that entrepreneurship is contagious. For a comprehensive rundown, readers can do no better than to read innovation expert Matt Clancy’s literature review on the subject. I’d also advise his follow up article which makes the claim that entrepreneurs “transmit to their peers the idea that “yes, even someone like you can become an entrepreneur.””

The upshot of all of this is that it should lead us to wonder about what we can do to increase exposure to entrepreneurship. The answers here will really depend on who we’re asking. For schools and universities, for instance, it might be to encourage them to invite founders in to inspire the next generation of entrepreneurs. For Members of Parliament, it might be using their unique role to convene networking sessions between existing and wannabe founders (as an aside, of all the events we put on, those in the Palace of Westminster receive the highest response rates by far).

One thing we shouldn’t overlook, however, is how spontaneous entrepreneurship can so often be. Successful startup ecosystems are precisely that not because of any great plan from on high, but because of the organic clustering of innovative, creative and ambitious minds, where ideas can cross-pollinate and collaborations can flourish. 

Doubling down on enabling agglomerative forces to run riot, therefore, might well be the best thing a government could do to increase the virality of entrepreneurship. Build good transport links, deliver livable neighbourhoods, and the serendipitous encounters between founders and non-founders alike will follow. 

Adviser Update

On Wednesday 21 February from 3.30-5pm, The Entrepreneurs Network is hosting an event at the House of Lords on what a potential Labour government would mean for Britain’s entrepreneurs. Learn more by clicking here.

The Entrepreneurs Network also published a short explainer on text-and-data mining, and how it is being regulated around the world. It can be found here.

Beauhurst published two reports recently. The first investigates new company incorporations in the UK after a record number of companies were started in 2023, and can be found here. The second explores the UK’s burgeoning engineering biology sector, and can be found here.

Tech Nation released their Global Talent Visa Report, which paints a picture of the changing face of global talent working in UK tech and outlines how the UK can continue to develop as an attractive destination for people around the world. It can be found here.

The Enterprise Research Centre published its latest State of Small Business Britain report. It draws together insights from a whole decade of ERC research, which are used to produce a manifesto for small business growth and productivity. It can be found here.

The ERC is also holding a free research showcase event on Thursday 22 February at Aston University. Delegates will hear about some of our latest work on the themes of exporting, productivity, digital adoption, rural enterprise, mental health and more. Find out more here.

In Parliament

In Business and Trade Topical Questions, Sir David Evennett asked about what steps are being taken “to help increase the number of female-led businesses.” In response, Business Secretary Kemi Badenoch replied: “Female-led businesses often face particular challenges, and in the Department for Business and Trade we work with the British Business Bank to ensure that those businesses continue to have access to finance. We have the Investing in Women code and a taskforce for women-led entrepreneurs.”

In a debate on pensions investment, Baroness Kramer asked: “is it appropriate to put pension money from small pots – people who cannot afford to lose part of that pot – into liquid, high-risk start-up investments, as the Mansion House compact seems to contemplate?” Replying was Baroness Vere, who said: “There are two things about that question. First, having a very large number of pension pots under £1,000 – I believe that there are now 4 million – is not a good way to manage pensions. We need to make sure that we can consolidate those into much larger schemes that can diversify their investments much better. However, the UK has a very poor record on pensions investing in unlisted securities, running at about 0.5% of pension pots. In Australia, the figure is 4.9% and in Canada, although it is not directly comparable, it is over 15%. Just because something is unlisted and illiquid does not mean that it cannot offer good returns over the long term.”

In a debate on the Finance Bill, Shadow Financial Secretary James Murray argued that “businesses in the UK that are keen to invest, grow, and make people across Britain better off are being held back by the lack of stability and certainty from this Government.” He went on to add: “We know that so much chopping and changing without any clear long-term plan has had a cost for our economy, by undermining prospects for investment, innovation and growth. Indeed, the Institute of Chartered Accountants in England and Wales has shared with us the view of its members that there is a lack of confidence when claiming R&D tax relief within the UK, and their belief that: “this has arisen due to the various changes made to the rules in quick succession over the past few years.””

Former Science Minister George Freeman asked in a debate: “What plans does the Department [for Business and Trade] have to make it easier for global investors to deploy money at scale in UK clusters?” Replying was the Minister of State Nusrat Ghani, who mentioned the “concierge service with the Office for Investment” and noted how: “We have also recently secured £4.5 billion through the advanced manufacturing plan. That, coupled with the research and development budget of around £39.8 billion between 2022-25, shows that we are ready to enable investment in the UK and to manufacture products in this area.”

APPG for Entrepreneurship Digest: January 2024

Happy New Year readers, I hope you had an enjoyable break and are fully – or at least almost fully – back into the swing of things at work.

Parliament returned from its Christmas recess earlier this week, but even before MPs began their journeys back to SW1, Rishi Sunak bestowed a belated present upon politicos when he informed journalists that his “working assumption” was that the next general election would be held in the second half of this year.

Certainly, most of us had expected this was the case anyway, but a growing portion were beginning to believe the Prime Minister would either plump for an earlier date, or push things right to the wire in 2025. For now, we’ll have to take him at his word – but what’s not up for debate is that Westminster’s legion of wonks and strategists are more focused than ever in developing policy agendas they hope the major parties will adopt as their own.

The United Kingdom won’t be alone in holding a vote this year, however. Almost half of the entire planet’s adult population could go to the polls in 2024. This includes populous nations such as India (1.4 billion people), Brazil (203 million), Pakistan (241 million), and Indonesia (280 million). In June, the European Union will conduct its tenth parliamentary election (and the first since the UK officially left). And, of course, all eyes will be on the United States come early November, when voters there will choose their next president.

It will be a surprise to nobody that the electoral extravaganza which this year looks set to be will pose critical questions for both entrepreneurs and others in the startup ecosystem. Many founders, investors, lobbyists and consultants will follow the contests closely, as they know just how important different outcomes can be for their own interests.

While a single election probably won’t make or break an entrepreneur’s fortunes, one party or candidate beating another could be either helpful or a hindrance at the margin. This might be on questions of regulation, tax policy, or immigration. I’ve also read some takes which suggest founders might decide to up sticks from (or think twice about moving to) a country if an election goes the ‘wrong’ way – we shouldn’t discount the extent to which vibes matter, and entrepreneurs are as mobile a breed as any.   

If you’re the sort of person who reads this newsletter, it’s probably safe to assume you’re someone with an above average interest in politics. People like us enjoy the twists and the turns. We like tuning in and thumbing the papers to see the latest plotline in our living psychodrama unfold. But if we’re being honest, that’s not really what entrepreneurs want or need. (See here for a good paper on how political uncertainty can hit investment and employment.)

In an ideal world, the trials and tribulations of government affairs wouldn’t be a concern for business owners – who we would rather were able to focus their energies on improving their products, upskilling their staff and so on. But the truth is, politics does matter. And it matters that entrepreneurs’ voices are heard at the volume they deserve. As 2024 unfolds, we’re looking forward to doing what we can to ensure they are, and that politics works for the benefit, not detriment, of our country’s founders.

Adviser update

Our Secretariat, The Entrepreneurs Network, will be hosting an event on the role entrepreneurs should play in supporting the next generation of founders. It’ll take place in the House of Lords, and you can learn more about it by clicking here.

Enterprise Nation’s StartUp Show enjoys its 10th anniversary at the end of January, featuring over 100 expert speakers and offering networking opportunities galore. Find out more by clicking here.

Beauhurst published fresh research in collaboration with Barclays Eagle Labs, on the UK’s high-growth ecosystems. Read it in full by clicking here.

In Parliament

The Energy Secretary, Claire Coutinho, gave a written statement on government funding to support households, businesses and the public sector drive improvements in energy efficiency and clean heating – including £15 million for a heat pump innovation accelerator competition.

The Data Protection and Digital Information Bill had a reading in the House of Lords. In his opening remarks, Viscount Camrose said: “I take this opportunity to thank Members of Parliament and the numerous external stakeholders who have worked with us to ensure that the Bill functions at its absolute best. Taken together, these amendments will benefit the economy by £10.6 billion over 10 years. This is more than double the estimated impact of the Bill when introduced in the spring.” He also added: “These reforms are expected to lower the compliance burden on businesses. We expect small and micro-businesses to achieve greater overall compliance cost savings than larger businesses. We expect these compliance cost savings for small and micro-business compliance to be approximately £90 million a year as a result of the domestic data protection policies in the Bill.”

In a debate on artificial intelligence, SNP MP Patrick Grady asked: “What recent discussions [the Science, Innovation and Technology Secretary, Michelle Donelan] has had with Cabinet colleagues on the potential for biases in artificial intelligence technologies in relation to people with protected characteristics.” In response, the Minister for Tech and the Digital Economy, Saqib Bhatti, said: “We are having cross-governmental discussions about AI, and we are very clear that AI systems should not undermine people’s rights or discriminate unfairly. This was a key topic of discussion at the AI safety summit, and it remains a priority for the Government. Fairness is a core principle of our AI regulatory framework, and UK regulators are already taking action to address AI-related bias and discrimination.”

In a written statement, the Levelling Up Minister, Jacob Young, announced the Freeports Delivery Road Map. In his own words, the Road Map: “sets out a range of areas in which Departments will go further in supporting freeports to create investable sites, land investment, and build clusters and durable local economic growth.”

APPG for Entrepreneurship Digest: December 2023

With Christmas and the New Year looming into view, this month’s digest will take a look back at what we’ve been up to during the previous twelve.

In terms of published research, while we only put out one report this year – we think it was a good’un, and, we also like to think, one which played a small role in affecting a big policy change. Funding to Flourish was written by Aria Babu and Sam Dumitriu and made the case for tax reliefs on equity investment. It explained why and how the Enterprise Investment Scheme, the Seed Enterprise Investment Scheme, and Venture Capital Trusts have been so instrumental in supporting Britain’s startup scene, but argued that they were in need of reform to ensure they continue to have such a positive impact going forward. I won’t delve into all of the recommendations the report made here, but I will note that many were adopted by the Chancellor at his Spring Budget. And while it’d be wrong to claim complete credit for this – a broad coalition of voices had been arguing for the changes – we were very pleased to see it nonetheless, as were the 300+ entrepreneurs who signed our open letter on the matter, which was published in The Telegraph.

We’re currently plugging away on more research due to be released early next year. That’s on the topic of the sharing economy, in a follow up to a previous report we wrote on the subject. It’s a project being led by my colleague Derin, so do drop him an email if you have thoughts.

Carrying out research is just the tip of the iceberg as far as our work is concerned, however. Just as important is the convening role we’ve continued to play this year – acting as a bridge between politicians, business groups, and other relevant stakeholders. All throughout the year we’ve held regular virtual meetings to update on what’s going on in the entrepreneurship policy space – and given the changes we’ve seen, we’ve had no shortage of material to discuss. On that note, if you’re part of an organisation focusing on how to help entrepreneurs and want to get involved more closely with us in 2024, do please get in touch – there are plenty of ways to engage.

Some of the changes we have seen and duly dissected have been those to the very makeup of government. Earlier in the year a smattering of new departments were created, giving us plenty to make heads and tails of, not least the Department for Science, Innovation and Technology, which has assumed a lot of the overall responsibility for entrepreneurship policy. We’ve also had changes in personnel, with Cabinet and Shadow Cabinet reshuffles, and we’ve done our best to keep readers informed about what these mean for Britain’s startups.

Not to be outdone, we’ve also had changes of our own. We were glad to see our Chair, Seema Malhotra MP, appointed as Shadow Skills Minister back in September, and Bill Esterson made Shadow Roads Minister. Meanwhile, Bim Afolami MP was given his first Government job as Economic Secretary to the Treasury, and Saqib Bhatti MP got a gig as Digital Economy Minister. Sadly, this did mean the latter two had to step down from our ranks, but it did at least allow more space for new additions – Brendan Clark-Smith MP, Anna Firth MP, Virendra Sharma MP, Paul Howell MP and Ben Bradley MP all joined in June.

As we inexorably draw ever closer towards the next General Election, it’s only natural that party politics is ascendant. One of the main things we hope we’ve shown over the last year, however, is that there’s still plenty of room for productive, cross-party work on a range of matters – and, for the sake of Britain’s entrepreneurial ecosystem, it’s crucial that continues. Startups can’t always operate to parliamentary timetables, but they do need support and a voice. We’ll make sure we’re doing all we can to provide it.

Thank you to all of those who’ve read our newsletters over the last year, who’ve supported our research, and who’ve come along to our meetings. We look forward to another productive programme of work in 2024, but for now, I’ll wish you a Merry Christmas and a Happy New Year.

Adviser Update

Our Secretariat, The Entrepreneurs Network, is organising a meetup for its Advisers on 24 January 2024. It’ll be hosted with OakNorth, and you can learn more about it by clicking here.

Tech Nation’s Rising Stars competition is back and open for applications – with finalists getting the opportunity to showcase their businesses on the London Tech Week (LTW) stage. Click here to learn more. 

The Tony Blair Institute published a new report called the State of Compute Access: How to Bridge the New Digital Divide. It reviews national compute capacity around the world, covering 55 countries across 25 indicators. Read it in full by clicking here.

Extend Ventures released their new report Diversity Beyond Gender UK 2023, which offers a quantitative state of the nation for entrepreneurs who are diverse by ethnicity, gender, and educational background. Read it in full by clicking here.

And last but not least, Enterprise Nation published a report of their own. Time is money looks at how adopting technology can make businesses more productive. Read it in full by clicking here.

In Parliament

In a debate on the National Insurance Contributions (Reduction in Rates) Bill, Priti Patel argued that merging NICs and Income Tax “would simplify taxes for the entrepreneurs and self-employed even further,” adding that it would also “help to make payroll much easier for businesses, and allow them to co-ordinate income and revenue in a much more straightforward way.”

In a debate on the Autumn Statement, the Business Minister Kevin Hollinrake said that: “Although taxes pay for vital public services, this Government are clear that they must not stifle business owners’ ambitions. Quite simply, our economy relies on those ready to take risks and to innovate. Time and again, these entrepreneurs tell me that a simpler tax system would make life easier for them. This autumn statement will not just reduce tax but reform it, while putting more money into employees’ pockets.” He noted that: “The abolition of Class 2 National Insurance will save the average self-employed person £192 a year. Alongside the 1% reduction in the rate of class 4 national insurance, some 2 million self-employed people will be saving an average of £350 a year from next April.”

In a later debate, also on the Autumn Statement, Wendy Morton noted that: “We started our family business back in 1991,” they did so “with an enterprise allowance of £40 a week from the Government. It is not possible to make business risk-free, but it is possible to create the conditions that support entrepreneurs. SMEs are the real wealth creators of our economy, and in this, the week leading up to small business Saturday, I am proud to support those in my constituency.” While she welcomed tax measures in the Statement, she argued for “a cut in Corporation Tax from its current high rate of 26% to its former level of 19%. That, I think, would be another tool to lead us towards the growth that we all want to see.”

In a debate on breaking down barriers to opportunity, Rob Butler told colleagues that the: “Key to opportunity is the economy. That is the case for everyone, whatever walk of life they are in. Too many people sneer at the private sector and criticise the profit motive, but it is entrepreneurs who take the risks and make the investments, and businesses that create the jobs and generate the wealth. Without them, there would be no money to pay tax and therefore no money to deliver the excellent public services we all deserve and want.” He went on to say that: “We need to remove the barriers to growth if we are to remove the barriers to opportunity. That means reducing regulation, incentivising investment and lowering taxes, all in a fiscally responsible way. I am particularly pleased that the Government have committed to addressing the drivers of low growth over increasing the national debt.”

In a debate on exports and SMEs, Ashley Dalton asked Trade Minister Greg Hands how businesses can “have confidence in the Government’s support for SMEs when Britain’s export growth is among the worst of the G7 economies and is forecast to be falling.” Replying, Hands said his colleague was “a bit off on the data. When we look at export data, we see that we had £877 billion-worth of exports in the 12 months to the end of September 2023. We are heading towards the £1 trillion export target, and that figure is up by almost £200 billion—or 29%—on the figure from five years ago, which was before Brexit.”

Meanwhile, in the House of Lords, AI Minister Viscount Camrose said that the Government’s approach to regulating AI adopts “an adaptive model which puts us not behind anyone in regulating AI that I am aware of. It is an adaptive model, and as evidence emerges we will adapt it further, which will allow us to maintain the balance of AI safety and innovation.”

APPG for Entrepreneurship Digest: November 2023

Not for the first time this year, this month’s digest centres on the big political story of the week – Rishi Sunak’s latest Cabinet reshuffle. While no new departments have been conceived this time around, the shake up was arguably more eye-catching than February’s, if only for the announcement that former Prime Minister David Cameron would be returning to frontline politics for the first time since stepping out of the spotlight in 2016 after losing his Brexit gamble. 

It’s hard to look past the pure politics of any reshuffle, although that doesn’t mean they don’t have important consequences for the future direction of policymaking – and, even with time quickly slipping away before the next general election has to be held, the switches made this week could still have significant ramifications for Britain’s startup scene. 

Sunak’s first act of the day was to sack the Home Secretary Suella Braverman. Better commentators than I can walk you through the reasons why the PM thought she had to go, but go she did. Her replacement, James Cleverly, was swiftly moved into post – meaning he will be the man to take responsibility for the country’s immigration frameworks, among other things. Groups representing startups could speak for hours about the importance of a competitive and navigable visa system for entrepreneurs, and they’ll be hoping that Cleverly is in listening mode.

Changes in the Home Office therefore left the Foreign Office without a helmsman. Few could have predicted the role would end up being filled by Cameron, who has cut a distant figure since leaving Downing Street, but a quickfire ennoblement saw him return to the Cabinet after a hiatus of no fewer than 2,680 days. He’ll most obviously front the UK’s responses to conflicts in Ukraine and the Middle East, as well as managing the usual diplomatic duties overseas. But also in his remit will be new challenges to when he was last in public office, not least participating in global conversations around the development of artificial intelligence (and continuing the dialogues of the recent AI Safety Summit brokered at Bletchley Park). Entrepreneurs working at this frontier of the economy will have their fingers crossed that any future regulatory frameworks are considered and proportionate, and enable them to build their cutting edge businesses.       

The above two job swaps predictably captured the majority of the newspaper headlines. But, and perhaps more interestingly, there were a slew of other changes, largely at ministerial level, which are worth pointing out for the UK’s entrepreneurial community. 

In the Department for Science, Innovation and Technology – an entity only created at the last reshuffle – George Freeman announced he would be stepping aside as a minister. In his stead, Andrew Griffith was appointed, saying that he is “look[ing] forward to building on [his] work as City Minister to unleash capital to support these exciting opportunities.” 

At the same time, Paul Scully, the Department’s Minister for Tech and the Digital Economy, was given the ‘Spanish Archer’, as he put it, and was replaced by Saqib Bhatti, who declared “we are on the brink of huge innovation” and that he is “excited by the possibilities and opportunities that lie ahead for us.” Scully also lost his role as the Minister for London, and while startups can be found up and down our country, the capital is undeniably its entrepreneurial hotspot, making the brief critically important. It will now be overseen by Greg Hands, who also snapped up a job as the Minister of State in the Department for Business and Trade, having previously held the role on three other separate occasions.  

Over at the Treasury, meanwhile, Laura Trott was appointed as the Chief Secretary, taking responsibility for spending decisions. She moved into the position having previously been the Pensions Minister, where she worked on the Mansion House reforms which aim to turbocharge investment opportunities for high-growth startups in the UK, and comes in at the deep end with the Autumn Statement due to be made just next week. 

Given the fact that entrepreneurs operate in just about every sector of the economy, in truth, just about every ministerial move matters for one startup or another. I’ve not yet mentioned the new Environment Secretary, Steve Barclay, or the new Health Secretary, Victoria Atkins, for instance, who will be eagerly watched by those in the UK’s burgeoning sustainability and healthtech industries respectively. The full list of changes can be found here. 

Adviser Update

Our Secretariat, The Entrepreneurs Network, launched the latest report from their Female Founders Forum, in partnership with Barclays. Accelerate to Excel looks at the challenges women entrepreneurs continue to face, as well as the progress that has been made over the last several years. 

Form Ventures’ latest newsletter argues the case for “fixing the regulators.” Read it here.

This Friday, GEN UK is holding a half-day conference on the importance of inclusivity and purpose driven entrepreneurship. Register to attend here.

Nesta’s Innovation Growth Lab published a report examining the case for supporting SMEs to take action on Net Zero, the challenges for policy interventions, and the role for experimentation. Read it here.

In Parliament

During a parliamentary debate on environmental, social and governance (ESG) developments, Alexander Stafford said that “since the turn of the millennium there has been a 647% increase in ESG regulations, alongside miles of other red tape in all shapes and sizes. The disclosure burden on investors and businesses is bigger than at any previous point, leading to whole sectors and teams devoted to auditing every aspect of a business.”

While discussing policies to “break down barriers to opportunity,” Rob Butler said that the “key to opportunity is the economy,” and rather than demonising the “profit motive,” debate should encourage entrepreneurship. 

In a debate on the future of the NHS, Paul Bristow highlighted that advances in artificial intelligence are promising great innovations in healthcare. He added that the “one-year NHS funding cycle” must be replaced with “multi-year financial settlements” to save money and enhance innovation. 

While debating the Government’s AI Safety Summit, Michelle Donelan, Secretary of State for Science, Innovation and Technology, said that copying EU legislation would be a mistake. She highlighted the praise the UK’s AI White Paper received and claimed that it led to “leading AI companies to set up their first international offices here in the UK.” 

Kevin Hollinrake, the Parliamentary Under-Secretary of State for Business and Trade, said that his Department was implementing policy recommendations from Theresa Villiers’ and Sir Iain Duncan Smith’s 2021 report on easing regulations to enhance growth. 

During a House of Lords session on the King’s Speech, the Lord Bishop of Oxford described artificial intelligence and climate change as “existential risks.” He claimed that encouraging innovation in machine learning is “welcome” but its potential impacts should be strongly discussed with civil society.

In the same session, the Lord Bridges of Headley highlighted that government spending to “save companies” is an unsustainable way “to encourage innovation and enterprise.”

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.

APPG for Entrepreneurship Digest: September 2023

All change! Well, some changes. Sir Keir Starmer marked the return of parliament from its summer recess last week with a reshuffle of his Shadow Cabinet. I’ll leave it up to others to pick over exactly where the refresh leaves the Labour Party, but one move that did catch our eye more than others was to see Seema Malhotra – our Chair – being handed the Shadow Skills brief.

Most of us intuitively appreciate just how important skills are to the entrepreneurial economy. It goes without saying that a more skilled workforce is going to be one which can generate stronger economic growth, and one which stands a better chance of developing the innovative technologies needed to tackle healthcare problems or climate change.

The more interesting question, however, is how to ensure the workforce is as skilled as it possibly can be. As luck (or prudent foresight) would have it, this is something that the APPG has spent a lot of time thinking about lately. We can’t claim to have all the answers, but over the last few years the issue of skills has cropped up on several occasions in the research we’ve published.

At the end of 2022, for instance, we launched Supporting SMEs Successfully – written by yours truly. This report examined how to boost productivity among smaller businesses, with one of the key areas of focus being the Government’s ‘Help to Grow: Management’ initiative, which aims to enhance skills among SME business leaders over a 12-week training course. While few could doubt the intention of Help to Grow: Management (and we certainly heard many positive testimonies about the courses when researching the report), underwhelming uptake numbers suggest that more could be done to encourage more managers to enrol on it.

In our report, we recommended exploring making the delivery of courses more flexible. As we note, while there’s no gain without pain, if potential participants are being put off by onerous requirements such as the time needed to complete the scheme, that doesn’t serve anyone’s interests. Shorter, more focused courses could still impart a great deal of wisdom, and turn the dial in upskilling the workforce.

That research concentrated on skills provision at the ‘top end’ – namely, people who’d already risen to senior positions within companies. But earlier that year we also set our sights on skills at a much more junior level. In Entrepreneurship Education, Finn Conway wrote about the benefits of teaching young people the skills necessary for starting and growing a business. He explained how England remains one of the few places in Europe that has yet to develop a specific entrepreneurship education plan for schools, and ultimately recommended that the Government should develop and publish a Youth Entrepreneurship Strategy for Schools.

Nobody would argue against striving for a more talented ‘native’ population, but for those skill sets which are either so scarce or needed so urgently, we shouldn’t begrudge having to bring them in from abroad. Immigration has been a tried and tested way to improve the country’s skills base for centuries, and foreign-born workers now represent a critical component of the UK economy. Recent research from The Entrepreneurs Network, our Secretariat, found that 39% of Britain’s 100 fastest-growing startups have an immigrant founder.

While perhaps a small sector (for now, at least), our report on Space Startups and Scaleups shone a light on how important having access to international talent is for companies in the industry. Gravitilabs’ Managing Director, Mark Roberts CBE, told us how: “Accessing talent is always tricky and we have to cast our net across the world to find the people we need,” before adding: “Having to sponsor skilled workers from overseas is also time consuming and costly for an SME.” Similarly, when researching our report on the Sharing Economy, one entrepreneur told us: “There’s a war for talent both at high-skilled (e.g. software engineers) and low-skilled levels (e.g. tradespeople). This has resulted in huge wage inflation which will filter through to pricing.”

Now, with that all being said, there are some who think the pro-skills discourse has possibly gone a little too far, and that the operative question is now more about how to ensure people can properly deploy the talents they have with maximum impact. Phrased slightly more positively, one might argue that we’ve actually already done a lot to fix skills challenges in the UK, and now the main limiting factor on economic growth is more down to our inability to build things such as infrastructure or housing, to allow people to put their skills to good use. Sam Dumitriu has written persuasively about why he’s a ‘skills sceptic’ – and I’d urge anyone to look past the (I’ve no doubt deliberately provocative) headline, and take seriously what he has to say.

Either way, what I am sure we can all agree on is that skills matter, and we should never rest on our laurels when it comes to boosting them. Certainly, we won’t let up in trying to understand what works here, and duly do our best to pass on what we learn to Seema in her new role – and indeed her counterpart in government too.

Adviser Update

The Entrepreneurs Network, our Secretariat, published two reports on the subject of immigration. The first – mentioned above, and called Job Creators 2023 – looked at the founders of the 100 fastest-growing companies in the UK, and discovered that 39% had a foreign-born founder. While the authors say this shows the importance of immigrants to the UK’s startup scene, it is down from 49% when they ran the numbers back in 2019.

The second report, called Passport to Progress, explains how immigration can enhance entrepreneurship and innovation, analyses international visa frameworks, and makes a series of recommendations for improving migration systems worldwide.

Finally from The Entrepreneurs Network, they are partnering with Fragomen to host a private tour and drinks reception at the Migration Museum in Lewisham on the evening of the 26 September. There are still some places left, and you can email to request one.

Beauhurst published Exits in the UK: IPOs and Acquisitions 2013–H1 2023, which explores the stages at which companies are exiting, the format of exits taking place, and the strategies business owners currently have in place.

The EIS Association is gearing up to host a series of ‘Ready Steady Grow!’ events around the country, bringing together entrepreneurs, intermediaries, fund managers, financial advisors, and angel investors to raise awareness and undestanding of the SEIS and the EIS. Click here to find out where and when they’ll be taking place.

In Parliament

As noted at the top of the Digest, Parliament has only just returned from recess, but Members of Parliament in both Houses have lost no time in raising issues important to Britain’s entrepreneurs and innovators.

Science Secretary Michelle Donelan told the Commons that a deal had been reached to join Horizon Europe, which: “gives the best and brightest of the UK’s scientific community access to the world’s largest research collaboration programme.” She further added: “The deal we have negotiated has been warmly welcomed by the whole of the scientific community. It gives it the certainty it needs to continue delivering long-term research and innovation, and it will enable it to change people’s lives and have a truly global outlook. Members do not need to take my word for it; today’s announcement has been supported by Universities UK, the Russell Group, all four of our prestigious national academies, leading tech businesses, including Airbus and Rolls Royce, and countless more.”

Responding was the Shadow Cabinet Office Minister Nick Thomas-Symonds, who criticised the time it took to secure the deal, saying: “today’s announcement is long overdue. It leaves vital questions outstanding. What I have no doubt about is that our brilliant scientific community can rise to the challenges and make the best of the hand that they have been dealt.”

Greg Clark, the Chair of the Science, Innovation and Technology Committee then weighed in, saying: “Science does not recognise borders, and everyone wins when the best UK scientists can work with the best in the EU and around the world, so this is a huge and positive announcement and has been greeted with delight and relief not just by the science community in the UK, but across Europe and beyond. My Select Committee, the members of which are in the Chamber, will examine the deal in detail, but may I congratulate the Secretary of State, her Minister and the whole of the Government on what seems to be a shrewd agreement that, for example, allows us to win grants even beyond our own financial contribution?”

In business questions, Scott Benton asked: “would now be an opportune time to consider holding a debate on the estimated costs of net zero and how it will affect ordinary families in this country?”

Leader of the House Penny Mordaunt responded by stressing the importance of technology in meeting the country’s climate objectives, noting: “If we want to be successful in making this transition, and helping other countries to do so, we can do that only with technology, solutions and innovation that people will love and want to adopt, and that will make their bills cheaper and their lives easier. That is the only way we will be successful in meeting our environmental ambitions. I encourage him to apply for a debate, and to focus on not just the costs, but the value of innovation and how we can encourage British businesses to be at the forefront of it, and take their ideas and sell them to the world.”

In a debate on Artificial Intelligence, Luke Evans said: “It is great to hear that the international community will be coming to Bletchley Park in November to discuss the principles and core values when dealing with AI. Given that AI is moving so quickly, with the likes of ChatGPT already impacting things like the work of school kids, what more can the Government do to make sure each Department is taking full account of the impact of AI?”

Parliamentary Secretary for the Cabinet Office Alex Burghart responded by saying: “The Cabinet Office, which is home to the Government Digital Service and the Central Digital and Data Office, takes a lead role, along with the Department for Science, Innovation and Technology, in co-ordinating work within Government so that we can take advantage of the extraordinary opportunities AI presents and guard ourselves against potential disadvantages.”

Meanwhile, in the House of Lords, Lord Bilimoria spoke in a debate on a report from the COVID-19 Committee about how the pandemic had rapidly accelerated digital trends. He said: “A hybrid world is very beneficial. We are now living in that world, where we make the most of in-person interactions and the virtual interactions that the technology allows us, which we demonstrated throughout the pandemic. The problem is that we can have a truly good hybrid world only if it is truly inclusive and everyone has access and is able to use the technology and the internet. The reality is that at the end of 2019, before the pandemic, there were more than 600,000 premises that were unable to receive decent broadband. Of course, many of those were in rural areas. I ask the Government to confirm whether they have a target of 100% broadband coverage throughout the United Kingdom, and by when they hope to fulfil that.”

APPG for Entrepreneurship Digest: August 2023

Entrepreneurs have never had a straightforward relationship with universities. Famously, a string of trailblazing founders dropped out of their institutions early to pursue their business dreams, while many others didn’t even bother attending in the first place.

Yet this isn’t to say higher education can’t be a gateway to success. Quite the opposite. It’s at university where many budding entrepreneurs get their first taste of real independence, begin mixing with new networks, and start devising companies of their own. For those striking out in specialist fields at the bleeding edge of innovation, university is often a prerequisite – you can’t generally run groundbreaking experiments without a lab in which to do them.

The upshot of all of this is that successful entrepreneurship policy is closely enmeshed with successful academic policy. I read with interest, therefore, a new policy proposal from the think tank Onward in a report they released recently. They call on the Government to give the Department for Science, Innovation and Technology responsibility for universities, rather than the Department for Education, as is the case currently. Onward argue that transferring responsibility would bring a number of benefits, including “more effective coordination of resources,” better support for “university-based incubators and accelerators by aligning their efforts with DSIT’s responsibility for commercialisation,” and ensuring that “university courses reflect the Government’s long-term science and technology objectives and cultivates skills that align with industry demands.” I recommend you read the paper in full – as it also makes a series of other recommendations for boosting innovation in the UK.

And it turns out that they’re not the only ones producing new ideas in this space either. The Entrepreneurs Network, the APPG for Entrepreneurship’s Secretariat, also published a short paper containing their thoughts on how to better unlock the UK’s spinout potential. (Disclaimer – I helped write this one.) Having consulted the literature on different models for commercialising academic research, the authors recommend the UK follows the lead of Sweden, and adopts the model known as “Professor’s Privilege” – whereby individual academics, rather than the institutions to which they belong, own the intellectual property they create in the course of their work. Evidence seems to suggest that this leads to higher rates of academic entrepreneurship and innovation.

For what it’s worth, here at the APPG for Entrepreneurship we’ve had a longstanding interest of our own in the ties – and, sometimes, the tension – between universities and entrepreneurship. In 2018, we published Enterprise Education, which made the case for imbuing students with the necessary enterprising skills to flourish in the twenty-first century. Among the recommendations it proposed were calls to reform the Teaching Excellence Framework so that universities aren’t punished when students drop out if it’s to set up a business – something which we think should be a mark of success, not failure.

Britain boasts a number of the world’s most prestigious universities. From them come some of the world’s most innovative entrepreneurs. Yet no country stays dynamic for long if it starts resting on its laurels. Thankfully, Britain doesn’t seem to suffer any lack of ideas on how to keep that from happening either.

Adviser Update

Next month on the 6th September, The Entrepreneurs Network will be hosting a reception in the House of Lords to celebrate the launch of their forthcoming report in partnership with the Association of Business Executives (ABE), which makes a positive case for how immigration and student mobility can enhance entrepreneurship, innovation and productivity worldwide. You can find out more by clicking here.

Two things to flag from Global Entrepreneurship Network UK – the first is the chance to apply to win LeZero Innovation Prize 2023, which awards cash and in-kind mentoring to help entrepreneurs get their green mobility, clean energy and smart city solutions on the radar. Click here to apply.

Second, they are also accepting applications for the second cohort of their RESTART Ukraine entrepreneurial programme. As before, this programme is focused on providing support and connections to Ukrainian women entrepreneurs who are seeking to start or grow their businesses. Click here to learn more.

In Parliament

In a debate on artificial intelligence in the House of Lords, Viscount Camrose, the Parliamentary Under-Secretary of State for Department for Science, Innovation and Technology, emphasised that artificial intelligence regulations should address “significant risks caused or amplified by AI” if the public is to trust this technology. He claimed that the Government’s regulatory framework will “articulate what responsible, safe and reliable AI innovation should look like.”

During the same debate, Labour’s Lord Browne described artificial intelligence as an “existential risk” and emphasised that because of this, discussions on artificial intelligence regulation should not be seen as a “a false dichotomy, with regulatory rigour on one side and innovation on the other.” He argued that regulations can benefit artificial intelligence companies, giving them “greater confidence in planning, resourcing and pursuing technological advances.”

Labour’s Lord Bassam, on the other hand, emphasised that innovation in AI is “ being driven by our UK tech start-up and scale-up firms” and described these firms as essential for achieving “sustained economic growth.”

Meanwhile, Lord Bilimoria underlined that if the UK is to lead the world in emerging technologies, it cannot achieve this “by investing 1.7% of GDP in research, development and innovation compared with the 3.1% and 3.2% that America and Germany do.” He suggested that investment in R&D and innovation should increase “by at least 1% of GDP.”

In a House of Commons session on technologies to decarbonise the economy, George Freeman MP, Minister of State for Science, Research and Innovation, highlighted that “UK Research and Innovation is investing £800 million annually on research and innovation in net zero, and £210 million through the industrial decarbonisation fund.”

While debating whether the UK will rejoin Horizon Europe, Chloe Smith MP, the then Secretary of State for Science, Innovation and Technology, said that the Government’s preference was “association” with the European body and that “the talks are continuing constructively, but we have not yet agreed a deal.”

APPG for Entrepreneurship Digest: July 2023

If you cast your mind back to the Autumn Statement last November, you’ll probably remember it as an exercise of utmost restraint. Each sentence of Jeremy Hunt’s speech was carefully crafted to reassure markets following the ill-fated ‘mini-Budget’ his predecessor had given two months prior. Stability and humility were the orders of the day – yet even here, the Chancellor couldn’t resist a little exuberance.

“I want to combine our technology and science brilliance with our formidable financial services to turn Britain into the world’s next Silicon Valley,” Hunt proclaimed. As the breeding ground of some of the most consequential technologies and companies in human history, one certainly couldn’t criticise the Chancellor of setting the bar on his ambitions too low.

At this point, it’s worth reflecting on how the Californian tech hub came to be such a powerhouse of innovation in the first place. While it’d be foolish to ascribe its success to any one single factor, a handful certainly stand out – from the world-class nearby universities which offered a healthy supply of inquisitive graduates, to the emergence of venture capital firms which meant money was readily available to fuel their ideas, to an experienced legal industry which enabled these ideas to be properly patented. A classic clustering effect ensued, with this virtuous circle perpetuating itself over time – drawing in ever more talent and finance, and pouring out ever more innovation.

So, if that’s the scale of the challenge, how equipped is the UK to tackle it? From the off, there are reasons for optimism. Britain is already home to several top tier universities, and its financial and legal industries are globally renowned. It has just about as good a foundation as any other place outside of the Bay Area to credibly claim to be able to emulate Silicon Valley. But what’s more, Hunt and his colleagues in Government can meaningfully point to a handful of recent measures which ought to make delivering on the lofty ambition all the easier.

Not long after the Autumn Statement, Hunt unveiled the Edinburgh Reforms – a wide-ranging policy package designed to give the financial services industry more freedom, which should improve access to finance for startups. Then, in his Mansion House speech this Monday, the Chancellor went further, announcing the ‘Mansion House Compact’. This will see many of the largest defined contribution pension schemes allocate more capital towards unlisted equities – up to five per cent by 2030, which could unlock an estimated £50 billion of investment for high-growth firms. (Hunt’s opposite number Rachel Reeves might point out, however, this is something Labour have long been calling, having endorsed a similar idea in their Start-Up, Scale-Up review last year.)

The day before Hunt’s address to the City of London’s great and good, the Sunday Times broke the news that his constituency neighbour and Levelling Up Secretary, Michael Gove is eyeing up plans to add as many as 250,000 homes to Cambridge while turbocharging investment into transport and lab infrastructure in the surrounding area. If innovators are to cluster, they need homes, offices and labs to physically cluster in – so it’s satisfying to see this idea in the works, given it aligns with calls many entrepreneurship campaigners have been making for years, not least our Secretariat The Entrepreneurs Network. Again, on this point, Labour would be keen to draw attention to their recent endeavour to rebrand as the party of the “builders, not the blockers” as proof that they understand the problem too.

These are just two of the most recent developments that one could point to as evidence that the Government’s aspiration to recreate Silicon Valley here in Britain is more than just a pipedream. But – and there’s always a but – let’s not get carried away.

Silicon Valley wasn’t built in a day. It required careful nurturing, and has had to remain attractive to entrepreneurs and investors year after year, decade after decade. Wise decisions from policymakers, such as banking reforms which spurred the VC industry in the 1970s, have proved critical in this endeavour. This will be no different this side of the pond.

Even so, innovation policy seems to be resembling a rare case of rousing rhetoric being matched by pragmatic policymaking. It also, pleasingly, enjoys cross-party consensus – something which will be of utmost importance given the often long timescales involved in getting innovation policy right. Whether Hunt succeeds in reshaping the UK as the next Silicon Valley won’t become clear for many years to come – but if recent news is anything to go by, Britain is certainly pointing in a decent direction.

Adviser Update

Beauhurst teamed up with Barclays Eagle Labs to produce a report on the UK’s high-growth quantum technology companies. Read it here.

Two opportunities from Global Entrepreneurship Network UK: the first is the chance to become an official Global Entrepreneurship Week (13-19 November) event organiser; the second is to join the Global Entrepreneurship Congress in Melbourne (19-22 September). Contact Elaine Gold for more information.

In Parliament

During a debate on the Online Safety Bill in the House of Lords, Baroness Harding asserted that “risk matters more than size” and noted that the rise of Threads shows how “small becomes big very quickly.” She further added: “I would argue one of the most important culture changes is that any bright, young tech entrepreneur has to start by thinking about the risks and therefore the safety procedures they need to put in place as they build their tech business from the ground up and not once they have reached some artificial size threshold.”

Labour’s Darren Jones MP, Chair of the House of Commons Business and Trade Select Committee, argued that the UK Government needs “to be more involved in the technology revolution” to curb its possible downsides. He emphasised that the “risks” could create “a country where technology is put upon people, instead of being developed with them, and where productivity gains result in economic growth and higher profits, but leave workers behind with reduced hours or no job at all. It is a world in which the pace of innovation races ahead of society, creatively destroying the livelihoods of many millions of people, and where other countries leap ahead of our own, as we struggle to seize the economic opportunities of the technology revolution.” During the same Commons debate on AI, Conservative Matt Warman MP claimed that “the Government’s White Paper [on AI] promotes both innovation and regulation. It does so in the context of Britain being the most advanced nation outside America and China for AI research, development and, potentially, regulation.”

Speaking about the All Party Parliamentary Group for Crypto & Digital Assets’ recent report, Dr Lisa Cameron MP of the Scottish National Party highlighted that “to be a hub of cryptocurrency” the UK needs to ease digital assets firms’ access to basic financial services: “The inquiry heard that firms were struggling to secure access to UK banking services. A high proportion of banks have refused to provide bank accounts to digital assets firms, even when those firms are regulated and licensed to operate in the UK. In addition, just in recent months, a number of major banks have also announced limits on transactions, making it more difficult rather than less.”

Paul Bristow MP reported that local officials in Peterborough and the Anglia Ruskin University want to establish a new research institute on sustainable energy, with the help and investment of energy conglomerates. The Conservative MP believes that this investment can “transform the local economy” and may bring “technology-focused foreign direct investment in the UK to drive growth in the green economy.”

In a sitting on Digital Markets, Competition and Consumers Bill, Max von Thun, the Europe Director at the Open Markets Institute, claimed that the debated legislation will bring more competition to the digital market which will be “very good for tech start-ups.”

While presenting a report on defence policy by the International Relations and Defence Committee, Baroness Anelay claimed that the Ministry of Defence is an unreliable partner for start-ups in the national security field, which are “the most innovative firms” in the industry. She called on the MoD to “consider changing fundamentally its approach to smaller high-tech and start-up companies” since the UK needs to invest “sufficiently and effectively” in innovative security capabilities.

During a debate on enhancing innovation in the NHS, the Parliamentary Under-Secretary of State for the Department of Health and Social Care Lord Markham said that the scale of the NHS creates a daunting challenge for startups in implementing and scaling their products or services across the public health agency.

Discussing the development of two new freeports in Wales, Dr James Davies MP said that the “freeports will help to level up north-west and south-west Wales and bring new high-skilled jobs to successful areas. They will become drivers of growth and employment in their areas, acting as hubs for regeneration, innovation and global trade.”

During a session on immigration, Tim Loughton MP argued that China’s political system will see more people from Hong Kong settle in the United Kingdom over time, who are “easily assimilated through existing links – family links and others – they tend to be very entrepreneurial, setting up businesses after studying here, and they really add to the economic prospects of this country.”

Debating the Financial Services and Markets Bill, Baroness Lawlor pointed out that the UK’s financial services industry is ahead of EU countries’ and criticised the EU regulations for making competition difficult for challenger entrepreneurial firms against the big players: “My main concern is that this diverse sector, which has flourished in the UK under UK law, remains under an opaque legislative system. EU regulation is unpredictable and the EU’s system, with the precautionary approach, seems to cover every eventuality but in practice, it can fall short. It often favours big players over small and nimble entrepreneurs and the challengers. There is little certainty about transactions in advance, and little predictability as to how the regulators will judge.”

APPG for Entrepreneurship Digest: June 2023

“None of this happened by chance,” declared Mayor of London Sadiq Khan when reflecting on the growth of the capital’s tech sector over recent years. He was addressing the opening morning of London Tech Week, which, as you’re receiving this, has for the last two and a bit days turned the Queen Elizabeth II Centre into a melting pot of entrepreneurs, investors, politicians, civil servants, journalists and many other interested punters.

We agree with the Mayor. It’s easy to look at London – streets ahead of other parts of not just the UK, but also Europe and the wider world too – and assume there’s something innately special about the city as a place to start and grow a business. But the truth is that it isn’t London that’s entrepreneurial, it’s the entrepreneurs who work there who are.

Prime Minister Rishi Sunak seemed to concur as well. Speaking just before Khan, he singled out ‘people’ as the starting point for London’s entrepreneurial success. He noted that the UK is “one of the most digitally literate societies in the world, with a higher percentage of STEM graduates than the US and 4 of world’s top 10 universities,” and that these skills are what are helping to build the UK’s strengths in fintech, creative industries, and engineering biology.

Sunak also recognised the fact that the UK is a magnet for international talent – citing research (not for the first time) from our Secretariat organisation The Entrepreneurs Network, which found that half of the 100 fastest growing businesses in the UK were set up by an immigrant. The Prime Minister also explained how reforms he helped craft, such as the High Potential Individual Visa, have paved new routes for the planet’s brightest and best to come into the country – working for innovative firms or establishing entirely new ones of their own.

Of course, people are just one ingredient in the overall recipe to achieving a truly flourishing entrepreneurial ecosystem. Others would include crucial factors such as access to capital, an enabling regulatory environment, an adequate supply of office and retail space, and decent transport networks to name but a few.

Certainly, all of these issues are things which are clear in our minds at the APPG for Entrepreneurship right now. This is the first newsletter since our last AGM, at which I’m delighted to say we added a handful of fresh MPs to our ranks. Anna Firth MP, Virendra Sharma MP, Paul Howell MP, Brendan Clarke-Smith MP and Ben Bradley MP all join as new Officers. We’re looking forward to working alongside them, and all of our Parliamentarians, to focus on the issues that matter most to the business founders in their constituencies.

For individual entrepreneurs, there’s a lot that comes down to chance. Maybe it’s happening to meet a VC who’s willing to back your idea; maybe it’s coming up with the idea in the first place. But for the entrepreneurship community as a whole, chance becomes less important, and deliberate decision-making takes precedence. The policies which get made in national and local government have tangible and significant consequences – whether for ill or good. And while no government can perfectly steer a part of the economy in exactly the direction it might wish, it can at least nudge it one way or the other. As we embark on another year of running the APPG, we’re excited to continue to campaign for changes to support entrepreneurs – and make their chances of success that little bit more certain.

Adviser Update

Our Secretariat organisation The Entrepreneurs Network will be in Parliament next week, co-hosting a breakfast event with OakNorth next Tuesday 20 June on what founders of mid-market firms need from the government. Places are limited, but click through to request to attendv.

Our friends at Beauhurst have been busy, publishing no fewer than three reports last week – including the third edition of their Top 200 UK Women-Powered Business report, another on gender and diversity in the UK tech sector, and finally one on equity investment in Wales.

In Parliament

In Topical Questions, Andrew Jones MP highlighted that in 2022: “women established more than 150,000 new companies in the UK, which is twice as many as four years ago and the highest ever, yet the number of women founding businesses remains well below that of men”, before asking: “What steps are being taken to further support female entrepreneurs?” Responding, the Minister for Women Maria Caulfield said: “We are committed to supporting female entrepreneurs, particularly in the high-growth sector. That is why we have launched the women-led high-growth enterprise taskforce, which has found that venture capital is a serious barrier. Currently, for every £1 of venture capital, 89p goes to companies led by men and only a penny to women. That is why getting access to venture capital and funding opportunities is a priority for female entrepreneurs.”

Shadow Science Minister Chi Onwurah raised the issue of late payments, saying: “every day thousands of our great British small and medium-sized enterprises are wasting precious time and money chasing late payments, at an estimated cost of £684 million a year.” In response, Business Minister Kevin Hollinrake said that she was: “absolutely right to raise the issue of late payments. I attended a roundtable yesterday as part of our payment and cash flow review consultation, which is hugely important. We have significant engagement with businesses across the piece. We are determined and ambitious to reform the rules on late payments to ensure that businesses get paid on time. We have made significant progress in recent years in our international performance, so we are not an outlier. Nevertheless, we can and shall do more. The results of the consultation will be made available shortly.”

In a debate on digital markets, Nadhim Zahawi MP said that the: “Competition and Markets Authority’s recent ruling blocking the acquisition of Activision Blizzard has made us an outlier,” before suggesting: “As we are doing in financial services, all regulators should have a remit for growth.” Replying to him was Business Minister Kevin Hollinrake, who highlighted the Smarter regulation to grow the economy policy paper, which proposes measure to: “[ensure] that Ministers, officials and others look at alternatives to regulation, rather than jumping straight to regulation, and have an earlier impact assessment of what regulation would mean for businesses’ costs, rather than just looking at other factors.” He also added that he: “absolutely [agrees] with him that the best regulator is competition – the No. 1 thing we want to drive forward – which is also the best thing for growth.”

In a Written Statement, Chancellor Jeremy Hunt detailed the Life Sciences Growth Package, in his own words, a series of “policies spanning regulation, research and development (R&D), infrastructure, skills and planning which is aimed at driving investment, growth and innovation.”

Minutes from the APPG for Entrepreneurship AGM 2023

Minutes from the AGM for APPG for Entrepreneurship

Date: 16th May 2023

Present: Seema Malhotra MP, Jo Gideon MP, Anna Firth MP, Virendra Sharma MP, Kerry McCarthy MP, John Hayes MP, Sally-Ann Hart MP, Paul Howell MP, Philip Salter (The Entrepreneurs Network), Eamonn Ives (The Entrepreneurs Network), Katrina Sale (Coordinator, APPG for Entrepreneurship).

Elections:

Seema Malhotra MP was re-elected as Chair and Registered Contact for the APPG.

Lord Bilimoria was re-elected as Vice-Chair.

Lord Leigh of Hurley was re-elected as Vice-Chair.

Bim Afolami MP was re-elected as an Officer.

Gagan Mohindra MP was re-elected as an Officer.

Saqib Bhatti MP was re-elected as an Officer.

Baroness Kramer was re-elected as an Officer.

Baroness Neville-Jones was re-elected as an Officer.

Jo Gideon MP was re-elected as an Officer.

Bill Esterson MP was re-elected as an Officer.

Selaine Saxby MP was re-elected as an Officer.

Anna Firth MP was elected as an Officer.

Virendra Sharma MP was elected as an Officer.

Paul Howell MP was elected as an Officer.

Ben Bradley MP was elected as an Officer.

Brendan Clarke-Smith MP was elected as an Officer.

The following Parliamentarians kindly support the APPG as Members:

Ian Liddell-Grainger MP

Catherine West MP

Bob Blackman MP

Fiona Bruce MP

James Daly MP

Katherine Fletcher MP

Nick Fletcher MP

Dr Rupa Huq MP

Dean Russell MP

Craig Williams MP

Baroness Donaghy

Baroness Kingsmill

Baroness Wolf

The Earl of Erroll

Lord Luce

Lord Aberdare

Lord Lucas

Minutes

Philip Salter, Founder of The Entrepreneurs Network (Secretariat to the APPG for Entrepreneurship) gave an overview of the work achieved by the APPG over the past year. The APPG has produced four reports exploring: tax relief on early stage investment; assessing current government support programmes for SMEs; the challenges faced by the space sector; and how schools can embed entrepreneurship into the curriculum. These reports typically involve a roundtable, a call for evidence, a written report and a launch event. The APPG has also hosted a roundtable with a US delegation of business groups. Philip thanked the current officers for their support and involvement over the past year.

Seema Malhotra MP, Chair of the APPG for Entrepreneurship, shared her thanks for the team’s efforts and commended them on the high quality of the reports and the overall engagement with parliament. It is a challenging time and many businesses are being forced to close due to the lingering impact of the coronavirus pandemic and wider global challenges. At the same time, the expectations of businesses and workers are undergoing a period of renewal as many people have stepped away from traditional employment. The role startups play in the future will be extremely important and the APPG should play a significant role in the upcoming year.

The Secretariat produced an Income and Expenditure statement for 2022 - 2023.

APPG for Entrepreneurship Digest: May 2023

** A reminder: if you’re an MP or Peer who wants to get more involved with the APPG for Entrepreneurship, we are on the hunt for new Members and Officers ahead of our AGM on Tuesday 16th May. Email our APPG Coordinator, Katrina Sale, at katrina@tenentrepreneurs.org to learn more. ** 

While the Coronation of King Charles III makes it seem like a lifetime ago, readers might remember that it was only last Thursday that saw council elections taking place up and down the country. Congratulations to any of you who gained or retained your seats, and commiserations to any who fell just short. I will leave it to others to pick over the results, but I won’t pass up the chance to use it as a convenient – if admittedly slightly tenuous – peg on which to hang this month’s newsletter.

Entrepreneurship and local government aren’t two terms which regularly find themselves cropping up in the same sentences, but on occasion they do – and for good reason. Councils are big spenders, and need to procure a diverse range of goods and services to carry out their responsibilities. This creates a wealth of opportunities for canny entrepreneurs to provide solutions – especially where they think they can do so in a particularly innovative or cost-effective way, as they so often prove they can. 

Indeed, that’s the message from the CEO of Enterprise Nation (and Adviser to our APPG), Emma Jones CBE, in Operation Innovation – an essay collection recently published by our Secretariat, The Entrepreneurs Network. She notes how: “accessing public sector contracts can act like an accelerator for SMEs. Government contracts are complex – but solid and reliable.” 

Yet the picture isn’t entirely rosy, and procurement in the UK is showing signs of ill – and worsening – health. Between 2012 and 2018, there was a fivefold increase in ‘single-bid tenders’ – whereby there was a contract which only a single company submitted a bid for, guaranteeing them to secure it. 

Councils themselves should therefore be proactive in thinking about how they can work more closely with entrepreneurs. Again, this is something Emma stresses in her essay. She notes that entrepreneurs and small businesses: “are all too often excluded from public contracts because the bidding process is too complex, or it requires mandatory previous experience of working on government contracts and years of audited accounts.” Readers won’t need to be reminded that entrepreneurs, while naturally savvy and ambitious people, seldom have the time to navigate mountains of paperwork, nor the resources to pay someone else to do it. It isn’t impossible to streamline how contracts are awarded while retaining necessary safeguards to ensure taxpayer money is being spent well. 

Emma also gives some good advice about more fundamental reforms which could help bring more entrepreneurs into the procurement fold. “Instead of being overly prescriptive when contracting for goods or services,” she writes: “governments should be willing to hear alternative approaches to the delivery of whatever it might be procuring – be that in education services, transport provision, or buying new technology.” By embracing more innovative forms of delivery, in the long run, the public – as both taxpayers and recipients – stand to benefit from higher quality services, provided at less expense. 

While Emma’s essay is a welcome contribution which highlights the challenge entrepreneurs often face, it is scarcely the only one. Almost exactly a year ago, The Entrepreneurs Network published a briefing paper co-authored with Dr Chris Haley (also an Adviser to our APPG), which covered how the procurement status quo hinders startups, and how we might go about fixing it. It’s still well worth a read, and goes to show how policy change is as much about a steady drumbeat as it is one-off moments. 

Innovation is typically something we associate with cutting-edge tech firms or medical breakthroughs. But it should apply equally as something to strive for in all walks of life, however mundane – and that includes humdrum local issues from collecting bins to filling potholes. As the latest crop of councillors nestle into their new positions, here’s to hoping that they appreciate the role entrepreneurs can play in delivering for the public.

Adviser Update

Our Secretariat, The Entrepreneurs Network, is hosting a roundtable discussion in Parliament with Shadow Minister for Immigration Stephen Kinnock MP on Labour’s approach to immigration and business. Find out more by clicking here.

Applications are open for GEN UK’s new programme, RESTART Ukraine, which is aimed at female founders from Ukraine. Find out more by clicking here.

The Enterprise Research Centre released new research on how much we know about the effectiveness of business advice. Read it in full by clicking here.

And they’ll be hosting an event later this month, showcasing research on workplace mental health and the links with productivity. Find out more by clicking here.

In Parliament

Chloe Smith was welcomed in the Commons as the new Science Secretary, covering for Michelle Donelan while she is on maternity leave. Rupa Haq asked her: “What steps she is taking to support the commercialisation of research.” Answering on her behalf was the Science Minister, George Freeman, who said that: “Better commercialising our UK research is completely key to our global science superpower and domestic innovation nation missions, and a key component of our science and technology framework and this Department’s work. I am delighted to report that spin-outs from universities have gone up sixfold in the past nine years, to £2.5 billion last year, and in the life sciences sector that has gone up 1000% since we took office.”

In the same debate, Tim Loughton asked what steps the Government is taking to: “ensure effective regulation of artificial intelligence technologies.” Responding, Chloe Smith said: “Artificial intelligence plays a vital role in our economy and society, from helping doctors to identify cancers faster to powering smart devices and driverless cars. We recognise the need to act not only to unlock the opportunities but to address the potential risks of this technology. Our White Paper articulates what the responsible development and use of AI should look like, supporting innovation while protecting people so that businesses, consumers and the wider economy can all benefit.”

A question came from Stephen Metcalfe, requesting a: “comment on the Department’s 10-point science and technology framework, which will help provide the long-term funding needed to turn the start-ups he has mentioned into sustainable, successful, globally leading businesses.” George Freeman was quick to reply with: “A fundamental part of that is converting the health of our start-up ecosystem into scale-ups. That is why the Treasury is leading on the re-regulation of pension funds – so that we can unlock some of our pension trillions and put it into supporting our companies to grow here rather than go to NASDAQ.”

The Business Minister, Kevin Hollinrake presented the Digital Markets, Competition and Consumers Bill to Parliament, claiming it will: “drive growth, innovation and productivity.” 

In a debate on the Non-Domestic Rating Bill, the Shadow Financial Secretary to the Treasury, James Murray, reiterated Labour’s promise to: “replace the business rates system with one that shifts the burden of tax away from the high street and on to online giants, that moves towards annual revaluations and that truly supports entrepreneurship.”

In a debate on Horizon Europe, the European Union’s flagship funding programme for research and innovation, SNP MP Martyn Day asked for an update on: “recent meetings between the UK Government and the European Commissioner.” Responding, the Europe Minister, Leo Docherty said: “We have always been at the centre of scientific innovation. I will not give the House a running commentary on the negotiations, but we do have optimism. We are confident that we will be able to secure that fair deal for researchers, businesses and taxpayers, with the kind of important research that the hon. Gentleman has mentioned.”

APPG for Entrepreneurship Digest: April 2023

Perhaps even more so than at the New Year, the changing of the seasons from Winter into Spring (and most importantly, the return of sunshine) gives us fresh impetus to take stock and properly plan for the next twelve months. For us in particular, it also means we’re thinking about our forthcoming AGM (Tuesday 16 May, 16:00-16.30), and with that, a call for new voices to join the APPG. 

So, cutting straight to the chase – if you’re an MP or Peer and would like to get involved, please get in touch with our APPG Coordinator Katrina Sale at katrina@tenentrepreneurs.org.

For those who need a little more persuasion, here’s why we think you should. We’re a small but dedicated team passionate about entrepreneurship in all of its forms – from small traders right up to those innovators building what might end up as globally significant companies. We want to promote them on their journeys, highlighting the issues they face, and, ultimately, creating a Britain which is more encouraging and enabling for entrepreneurs seeking to make a difference in the world – not just turning a profit, but providing jobs, tackling social immobility, developing solutions to problems like climate change, and so much more. 

The main way in which we do that is through the research we conduct and publish. In the last twelve months, we’ve looked into four distinct policy areas: how to equip young people with the skills to succeed in a fast-changing world of work (Entrepreneurship Education); how to ensure the UK occupies a leading position in the new space race (Space Startups and Scaleups); how government programmes to boost productivity among smaller firms can be refined to deliver the best bang for their buck (Supporting SMEs Successfully); and making the case for tax relief on growth investment so that ambitious entrepreneurs have access to the capital they need to take their business to the next level (Funding to Flourish). 

Alongside this programme of research, we host a drumbeat of events throughout the year, put out regular Calls for Evidence on policy issues, convene policy experts at a virtual roundtable once a month, and, of course, every four weeks this newsletter lands in inboxes to give a regular update on what matters most to Britain’s thriving startup ecosystem. 

The entrepreneurs we work with are a fastidious and self-reliant breed, but even they can’t do it all on their own. It’s crucial that Parliamentarians understand and appreciate the challenges they face, and that’s where we hope to come in – bridging a gap between founders and legislators. We couldn’t do what we do without our fantastic Chair, Vice Chairs, Officers and Members to take up our campaigns and policy recommendations – speaking about them not only in the Commons and the Lords, but also at events and in the media. 

So once again, if you’d like to get involved, please get in touch with our APPG Coordinator Katrina Sale at katrina@tenentrepreneurs.org. (And for readers who aren’t Parliamentarians, why not suggest your local MP does?)

Adviser Update

Our Secretariat organisation, The Entrepreneurs Network, is looking for a new Researcher to join their team. A full job description can be found here – if you know someone who might be a good fit, there’s still a few days left before it closes. 

On Thursday 20 April they will also be hosting Benedict Macon-Cooney to discuss the Tony Blair Institute’s report A New National Purpose. You can register to attend by clicking here.

Then on Tuesday 25 April, they are launching an essay collection on the ingredients of innovation. Find out more and request a place by clicking here.

To celebrate the launch of our report on growth investment, we are hosting an event on Wednesday 19 April in the House of Lords. You can request a place by clicking here.

The Enterprise Investment Scheme Association EISA Awards are now open for entries. Categories include Best EIS Investee Company, Best SEIS Investee Company, and Entrepreneur of the Year. Learn more by clicking here.

The Centre for Entrepreneurs is hosting its 6th annual Incubator and Accelerator Network conference. Learn more and register to attend by clicking here.

The Enterprise Research Centre is hosting its 8th annual  State of Small Business Britain Conference. Learn more and register to attend by clicking here.

GEN UK are hosting their inaugural Founder’s Friday ‘Open Mic’ session – a chance to connect with other founders and entrepreneurs and discuss what you’re up to. Learn more and register to attend by clicking here.

In Parliament

In a debate following the Budget, the Chancellor Jeremy Hunt was eager to talk up Britain’s record on business: “Today, we face the future with extraordinary potential. The World Bank said that of all big European countries, we are the best place to do business. Global chief executives say that apart from America and China, we are the best country to invest in. We became the second country in the world to have a stock of foreign direct investment worth $2 trillion, and London has just pipped New York and 53 other global cities to be the best place in the world for female entrepreneurs.”

Also debating the Budget, Daniel Zeichner criticised the Government’s policy on R&D Tax Credits: “SMEs and start-ups are still worse off than they would have been before the changes that were made in the autumn. The Government are still cutting support for R&D in start-ups and small businesses – to the tune of £2 billion over the next five years, according to one estimate,” and adding: “I am afraid that this partial, half-hearted U-turn has not convinced our leading entrepreneurs and knowledge creators that the Government are serious about science and innovation or about the economic growth it stimulates.”

But Priti Patel hit out at the recent rise in Corporation Tax, saying: “that we need a simplified tax code underpinned by lower taxes. We have been talking about that for years in this House but we struggle to deliver it. Of course, businesses are frustrated by that because they are the ones that have to pay the costs of it. Entrepreneurs and small businesses are subject to more regulatory costs and more restrictions, which stifles innovation. We need to do much more in that space.” 

In the House of Lords, Baroness Lawlor struck a similar tone: “This economy prospers as a challenger economy into which new entrants and entrepreneurs can come and take pride, being rewarded, not penalised, for success. The high-tax, high-spending economy must be reversed,” as did one of our Officers, Lord Billimoria: “Putting up taxes is stifling growth and the recovery. As history has shown, when George Osborne reduced corporation tax from 28% to 20% and then to 19% – he actually wanted to go down to 15% – we actually increased our tax take. Will the Minister acknowledge that? By trying to get £18 billion more a year and putting up corporation tax by almost one-third in one swoop, from 19% to 25%, you are killing the goose that lays the golden egg.”  

Following the turmoil of Silicon Valley Bank, Shadow Chancellor Rachel Reeves asked how her opposite number would ensure that this didn’t lead to increased risk aversion from other banks, and that entrepreneurs would have access to the capital they need. The Chancellor responded by saying he will outline a “full solution to those issues in the autumn statement,” and also references moves made last year to unlock pension funds. 

Tim Loughton noted that: “Research and development is particularly resource intensive and in need of raising capital,” and asked what is the Government: “doing to help tech and life science companies raise money on the London markets?”

Responding was the Science Secretary Michelle Donelan, who highlighted that the Government have made: “significant reforms to improve London as a listing destination, and we continue to engage with sectors to secure the most innovative companies in the UK stock exchange.” 

APPG for Entrepreneurship Digest: March 2023

With the Budget taking place tomorrow, this month’s newsletter is hitting your inboxes a day earlier than usual. 

As is the case ahead of any fiscal event, a long list of individuals, charities, private companies, and trade associations have been doing their best to draw the Chancellor’s attention to the specific issues close to their own hearts. And we’ll admit to doing a little on that front ourselves. 

At the start of the month, we launched our latest report – Funding to Flourish – which made the case for tax reliefs on growth investment. Our headline policy ask called on the Government to lay the necessary legislation to extend and enhance EIS, SEIS and VCTs, which entrepreneurs tell us time and again are critical to the success of their business. (In fact, The Entrepreneurs Network, our Secretariat organisation, published an open letter of over 300 entrepreneurs backing the report’s chief recommendation – which you might have seen reported in The Telegraph.)  

We don’t know for sure whether Jeremy Hunt himself was thumbing through a copy of our report, but we certainly took encouragement from a letter he wrote last week to Harriett Baldwin, Chair of the Treasury Select Committee, in which he said it was the Government’s: “firm intention to extend [the schemes] beyond the current sunset on 6 April 2025.” Further details, he added, will be published: “in due course and in good time.” 

And this isn’t to claim any more credit than we strictly deserve. Countless different groups have made similar pleas of late – something which only serves to underscore the breadth and depth of support for these schemes, and their importance to the startup ecosystem. 

Elsewhere, others have been busy setting out what else they want to see from the Chancellor when he stands at the dispatch box. 

One issue that has been bubbling away since the Autumn Statement last November is the future of R&D Tax Credits. Form Venture’s Leo Ringer declared it to be “*the* item to watch out for”, while Coadec released the results of a survey of over 250 startup founders about the planned changes. Though the respondents were self-selecting, the results nonetheless make for uneasy reading: 97%  agreed with the statement: “I expect the cuts to severely impact my startup”; 89% strongly agreed with the statement: “If the cuts go ahead as planned I believe the UK will be made significantly less attractive to startups and investors”; and 93% agreed with the statement: “I am concerned that the cuts will impact the growth trajectory of my business.” Altogether, the median figure startups expect to lose annually was £40,000, and the mean figure was £100,363. 

A focus on business investment is another key subject of discussion. Nobody doubts the UK has underperformed for years on its record of investment. Half a decade ago, we published research calling for reforms to the Annual Investment Allowance to boost business productivity. And now there are widespread worries that the coming changes to the tax landscape will only make matters worse. Numerous groups since then have echoed our original calls – not least the CBI, who are asking for the Chancellor to introduce full expensing as a replacement for the super-deduction. In a recent interview, Hunt seemed to suggest that good news may be on its way – with the Chancellor rightly noting that it is the effective, rather than the headline, rate of corporation tax that should be the operative focus. 

A further perennial challenge for startups (and indeed virtually all businesses), but one that is hitting particularly acutely of late, is access to talent. Addressing skills shortages can take many forms, and the Chancellor looks set to take a multifaceted approach – with reforms to childcare and measures to encourage over-50s and benefit claimants back into the labour market already being trailed. 

One way of meeting firms’ needs is through attracting overseas workers. Following last year’s Autumn Statement, much was made of Hunt’s proclamation that immigration will be: “very important for the economy” – although chatter in the run up to this Budget about potential reforms has been relatively muted. (Some groups, for instance UK Hospitality, have nonetheless suggested small changes – such as scrapping the Immigration Skills Charge – to plug current skills gaps.)

It’s easy to spend too long pontificating about exactly what to expect for any Budget (my apologies for making you read until this point to say so). Nonetheless, it does feel as if this is a particularly important one for entrepreneurs and the entrepreneurial community – especially following the collapse of Silicon Valley Bank. 

Many founders will no doubt be watching tomorrow’s statement closely. Given recent turbulence, it’s tempting to say that a good Budget will be a boring Budget. But we shouldn’t use that as an excuse to mask the fact that our country’s innovators continue to face hurdles. Policy change to support them doesn’t have to mean revolution – and there are lots of areas where even minor tweaks could pay big dividends. 

** Be sure to follow our Secretariat organisation, The Entrepreneurs Network, on Twitter for their immediate reaction about what the Budget means for entrepreneurs, and sign up to their Friday newsletter to catch their more developed analysis by clicking here. ** 

Adviser Update

On Thursday 16 March, The Entrepreneurs Network is partnering with the Small Business Roundtable, Enterprise Nation, Intuit and Federation of Small Businesses on the Entrepreneurship Exchange 23 – which will bring together small businesses, entrepreneurs, government leaders, and subject matter experts from across the globe. You can find out more and register by clicking here.

Then, on Wednesday 22 March, they are hosting another roundtable to launch a forthcoming report written in partnership with Enterprise Nation, looking at SMEs and international trade, with Mark Garnier MP – Member of the International Trade Committee – as the guest speaker. You can request a place by clicking here.

To celebrate the launch of our aforementioned report on growth investment, we are hosting an event on Wednesday 19 April in the House of Lords. You can request a place by clicking here.

The Centre for Entrepreneurs is hosting its 6th annual Incubator and Accelerator Network conference. Learn more and register to attend by clicking here.

The ScaleUp Institute launched the 2023 edition of their Female Founders Index. Read all about it by clicking here.

In Parliament

On 7 March, the still relatively new Science, Innovation and Technology Secretary Michelle Donelan led a debate on the Science and Technology Framework which was published the day previously. She told the House of Commons that her Department’s: “work is based on improving people’s daily lives in ways they can feel and see around them,” and that the Government is: “both reactive and, crucially, proactive when it comes to science and technology, to ensure that we can be a superpower by 2030.”

Shadow Minister for Science, Research and Innovation Chi Onwurah said: “It is good to see the Government setting out the principles for identifying the scientific capabilities that we need to protect and grow, and the outcomes that we wish to see from science, as well as seeking to increase STEM skills in teaching and support for start-ups and spin-outs.” But she also added: “I fear that this framework is another wish list designed to be shelved or scrapped at the earliest convenience of a Government addicted to sticking-plaster policies.”

Last Wednesday was International Women’s Day, with tributes made across a variety of issues – not least those praising successful female entrepreneurs. In the House of Lords, Baroness Scott highlighted the Government’s record on promoting female entrepreneurship, telling colleagues about the: “considerable decline in the gender pay gap, which over the last decade has fallen from 19.6% to 14.9%, with the percentage of women in employment going up from 66.5% to 72.3%.”

In the House of Commons, Labour Members of Parliament used the moment as a chance to speak about their plans to bring in a requirement for large companies to publish and implement a “menopause action plan.” The Shadow Secretary of State for Women and Equalities Anneliese Dodds said that: “Many businesses have welcomed that measure, but so far the Government have not yet adopted it”, before adding: “The nodding of the Minister on the Front Bench leads me to hope that they may do so.” 

The Genetic Technology (Precision Breeding) Bill seeks to better regulate novel techniques aimed at, among other things, increasing crop yields. In the House of Commons, former Environment Secretary Theresa Villiers asked whether the Farming Minister Mark Spencer believed the Bill could: “release vital technological innovation” – to which he responded: “of course”. Meanwhile, DUP MP Jim Shannon also praised the Bill for the possibilities it could unlock in improving animal welfare, by preventing and protecting against diseases – to which the Minister replied: “The Government are committed to maintaining our already high animal welfare standards and we want to improve and build on that record.” 

Open letter: Founders for SEIS, EIS, and VCTs

Ahead of the Spring Budget 2023, The Entrepreneurs Network coordinated an open letter for founders to sign, in support of extending and enhancing tax reliefs on growth investment. Following are our first 200 signatories.

Dear Sir/Madam

The United Kingdom has an enviable start-up ecosystem. Over the last decade, the amount invested in start-ups has increased seventeenfold, from £1.6bn in 2011 to £27.7bn in 2021. London is by far and away the start-up capital of Europe – receiving twice as much investment as second-place Paris. This investment has helped establish world-leading companies – creating thousands of well-paying jobs, and generating tax revenues to pay for public services in the process. 

Much of this success is owed to pragmatic government support, providing the right environment for the ecosystem to thrive. Among this support has been the UK’s tax relief schemes: the Seed Enterprise Investment Scheme (SEIS), the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs). All of these schemes confer a tax benefit to people who take a risk in backing British start-ups, and many founders who have signed this letter agree that they have been indispensable to getting their business off the ground.

At the Autumn Statement last November, the Chancellor Jeremy Hunt confirmed the Government would be expanding the generosity and availability of SEIS. The amount of investment companies could raise through it would increase by two thirds, and annual limits for individual investors would double. The asset limit threshold would also rise, and the age limit for a company to be eligible would increase from two to three years. These updates were music to the ears of Britain’s start-up scene. But despite the welcome news, the Government still is yet to pass the necessary legislation to put these proposed changes into practice.

EIS and VCTs face further uncertainty. In the accompanying documents to the Autumn Statement the Government said it “sees the value of extending them in the future.” This is a welcome statement but requires further detail. Investors and entrepreneurs know the lifespan of the schemes are finite unless legislation is passed to extend them.

Prioritising start-ups can help the Government deliver on its agenda for growth. It should start by passing the necessary legislation to cement the position of these targeted tax reliefs, which so many start-ups rely on to flourish. Uncertainty about their future is already negatively impacting start-ups looking to raise investment, as nobody can be sure about what the rules for follow-up fundraises may be. The forthcoming Budget gives an opportunity to set this straight – and we, as the start-up community, hope the Chancellor takes it.

Signatories

1. Aron Gelbard – Co-Founder & CEO, Bloom & Wild

2. Cécile Reinaud – Founder, Seraphine

3. Chris Hulatt – Co-Founder, Octopus

4. Dr Sarah Wood OBE – Founder, Investor & Non-Exec Director, Portfolio

5. Emilie Vanpoperinghe – Co-Founder & CEO, Oddbox

6. George Graham – Co-Founder & CEO, Wolf & Badger

7. Giles Andrews OBE – Founder, Zopa

8. Hiroki Takeuchi – Co-Founder & CEO, GoCardless

9. Jonathan Petrides – Founder & CEO, allplants

10. Kathryn Bricken – Founder, Doughlicious

11. Melissa Morris – CEO, Lantum

12. Nicholas Hawker – Co-Founder & CEO, First Light Fusion

13. Rajeeb Dey MBE – CEO, Learnerbly

14. Saurav Chopra – Co-Founder, Perkbox

15. Sean Ramsden MBE – Founder & CEO, Ramsden International

16. Tom Adeyoola – Co-Founder, Extend Ventures

17. Virginie Charles-Dear – Founder, ToucanBox

18. Adrian Pepper – CEO, Pepper Media Group

19. Alan Wing-King – CEO, Syntegra Consulting

20. Alastair Campbell – CEO, Hurricane Works

21. Alec Mills – Founder, DAME

22. Alex Stephany – CEO, Beam

23. Alexandra Rico-Lloyd – Founder, Bike Club

24. Alexsis de Raadt St James – Founder, Merian Ventures

25. Alison Cork MBE – Founder, Alison at Home

26. Alison Ettridge – Founder & CEO, Talent Intuition

27. Amanda Gummer – CEO, The Good Toy Guide

28. Amanda Thomson – Founder & CEO, Thomson and Scott

29. Amelia Rope – Founder, Three Minutes

30. Amy Livingstone – Co-Founder, Cheeky Chompers

31. Andrew Brode – Chairman, RWS Holdings

32. Andrew Clayton – Founder & CEO, Fermtech

33. Andrew Dixon – CEO, ARC InterCapital

34. Andrew Tillard – Co-Founder, Animos

35. Andrew Yates – CEO, Artesian Solutions

36. Ann Kramer – CEO, The Electrospinning Company

37. Anne-Laure Le Cunff – CEO, Ness Labs

38. Anthony William Catt – Founder & Director , Ventures 54

39. Antigone Cote – Director, Quantico Financial

40. Aparajita Roy – Co-founder , KornChain

41. Archie Adams – Managing Director, Aqualiner

42. Asi Sharabi – CEO, Wonderbly

43. Audrey Mandela – Co-Founder, Multimap

44. Ben Greenstone – Founder, Taso Advisory

45. Bianca Cefalo – Co-Founder & CEO, Space Dimensionally Optimized Technology Satellites

46. Bill Thomas – Founder, Acresis

47. Brendan Beeken – Founder & CEO, Moni Talks

48. Brett O'Farrell – Co-Founder & CEO, KatKin

49. Cassandra Stavrou – Founder, PROPER Snacks

50. Catherine Bedford – Founder & CEO, Dashel Helmets

51. Chi-chi Ekweozor – Founder & CEO, Attendist

52. Chris McCullough – Co-Founder & CEO, Rotageek

53. Christian Owens – Founder & CEO, Paddle.com

54. Christiana Stewart-Lockhart – Director General, EIS Association (EISA)

55. Christina Richardson – Founder & CEO, weare3sixty

56. Christopher Baker-Brian – Co-Founder, BBOXX

57. Cindy van Niekerk – Founder & CEO, Umazi

58. Claire Burrows – Founder & CEO, Air & Grace

59. Claudine Adeyemi – Founder & CEO, Earlybird

60. Colin Glass OBE – Partner, WGN

61. Connie Nam – Founder & CEO, Astrid & Miyu

62. Cordelia Meacher – Founder & Managing Director, FieldHouse Associates

63. Craig Jamieson – Founder, Straw Innovations

64. Cristiana Banila – Co-Founder & CSO, Mitra Bio

65. Damon Oldcorn – Managing Partner, Oldcorn & Oldcorn LLP

66. Dan Bladen – Founder & CEO, Kadence

67. Dan Kieran – Co-Founder, Unbound

68. Dan Martin - Founder, Dan Martin Content & Events

69. Dan Vahdat – Founder & CEO, Huma

70. Danny Dixon – Founder and CEO, Portevo

71. Darren Evans – Founder & CEO, Dylogic

72. David Murray-Hundley – CEO, Pario Ventures

73. David Webster – Co-Founder, Global Tech Connect

74. Deepti Atrish – Founder & CEO, Poonyah Care

75. Deirdre Mc Gettrick – Founder & CEO, ufurnish.com

76. Derek Watson – Founder & Creative Director, CanalPath Creative

77. Diana Hodgins – CEO, Dynamic Metrics

78. Diane Young – CEO, Carnyx Group

79. Dinesh Dhamija – Founder, Ebookers

80. Douglas Orr – Founder & CEO, Message Matrix

81. Dr Norman E Price OBE – Director, BCRS

82. Dr Paul Reynolds – CEO, FSD Active

83. Duncan Cheatle – Founder & CEO, Learn Amp

84. Ed Bussey – Serial Entrepreneur,

85. Edward Green – CEO, NCIMB

86. Edward Spurrier – Director, 7SFI

87. Elizabeth Tweedale – CEO, Cypher Coding

88. Ellie Webb – Founder, Caleño Drinks

89. Elliot Street – Co-Founder & CEO, Inovus Medical

90. Emma Lawrence – Co-CEO, Starfish Accounting

91. Emma Little – Founder & CEO, ExecSpace

92. Emmanuelle Spriet – Founder, GETS Consulancy Services and SEMBA

93. Erika Brodnock – Co-Founder & CEO, Kinhub

94. Felicity Briggs – Founder, Briggs Financial Services

95. Francis Toye – Founder & CEO, Unilink Software

96. Giovanna Forte – Founder & CEO, Forte Medical

97. Glenda Devlin – Managing Director, Your Health and Care

98. Hugh Aldous – Chairman, Downing Strategic Micro-Cap Investment Trust

99. Ira Guha – Founder, Asan

100. Irina Pafomova – Co-Founder, Engelworks

101. Jacob Herandi – Co-Founder & COO, Kinhub

102. James Frewin – Founder, OCTOBER

103. James Palmer – Founder, Stratal

104. James Rickard – CSO, Biotherapy Services

105. James Turford – Co-Founder & COO, Nested

106. Jamie Strauss – Founder & CEO, Digbee

107. Jarmila Yu – Founder, YUnique Marketing

108. Jonathan Gan – Co-Founder & CEO, Whichit

109. Jonathan M Wogel – CEO, NorthWest EHealth

110. Jose Videira – Co-Founder & CEO, Synbiosys

111. Josh Lachkovic – Founder, Amphora

112. Josie Baum – Managing Director, ARC Club

113. Julia Elliott Brown – Founder & CEO, Enter The Arena

114. Julie Wilson – Co-Founder, Cheeky Chompers

115. Julien Seligmann – COO, SeedLegals

116. Karim Sekkat – Managing Director, Oxford Engineering Group

117. Karina Robinson – CEO, Redcliffe Advisory

118. Kathryn Bumby – Founder, Yorkshire Pasta Company

119. Kathryn Parsons – Founder & CEO, Decoded

120. Katie Lopes – Founder, Stripe & Stare

121. Keisha Shah – Founder, Teddo Play Educational

122. Keith Tsui – CEO and Co-Founder, Medwise AI

123. Kelly McCabe – Founder & CEO, Perci Health

124. Kerry Bolt – Co-Founder, B&B studio

125. Keyu Sumaria – Co-Founder, The Oblique Life

126. Kim Nilsson – Co-Founder & CEO, PeripherAi

127. Laura Towart – Founder & CEO, Vivan Therapeutics

128. Logan Naidu – CEO, Dartmouth Partners

129. Lorna Harries – Co-Founder & CSO, SENISCA

130. Louis Bedwell – Managing Director, Mission Ventures

131. Louise Hill – Co-Founder and COO, GoHenry

132. Lucy Stonehill – Founder & CEO, BridgeU

133. Manya Klempner – Founder, Rathbone Boxing Club

134. Mark Nicholson – Co-Founder & CEO, Vivacity Labs

135. Martin Banbury – Founder, Streetify

136. Mat Oram – Co-Founder & CEO, AdviseInc

137. Matthew Dreaper – Co-Founder, Oxford Space Systems

138. Merilee Karr – Founder & CEO, UnderTheDoormat Group

139. Michael Covell – Chairman, Cura Opis

140. Michael Goulden – Co-Founder, Kerbo Charge

141. Michael Grimsdale – Director, Graeme Consultancy

142. Michael Murdoch – CEO, The House

143. Mike Spicer – Founder, PolicyDepartment

144. Nicholas Beatty – Founder, Zenobe Energy

145. Nick Giles – Co-Founder, Seven Hills

146. Nick Patrick – Founder, Vicit

147. Nick Roach – Director, Geminus Innovation

148. Nicola Piercy – Co-Founder, Stripe and Stare

149. Nigel Parrott – Co-Founder, Mission Ventures

150. Nina Mohanty – Co-Founder & CEO, Bloom Money

151. Paddy Willis – Co-Founder & Chairman, Mission Ventures

152. Paul Baker – Founder, St Pierre Groupe

153. Paul Farrer – Founder & Chairman, Aspire Global Network

154. Paul Gaudin – Founder & CEO, CareRooms

155. Paul Stephen – Co-Founder, Remarkable Group

156. Perry Haydn Taylor – Founder, Big Fish Design

157. Peter Roberts – Chairman , Gymfinity Kids

158. Philip Salter – Founder, The Entrepreneurs Network

159. Priya Guha MBE – Venture Partner, Merian Ventures

160. Richard Chambers – Founder & CEO, Get A Drip

161. Richard Mabey – Co-Founder & CEO, Juro

162. Rob Adlard – Co-Founder & EO, Gravitilab Aerospace Services

163. Rob Griffin – CEO, MIRACL

164. Robin Lodge – Director, Igence Software

165. Rockwell Shah – Founder, Pzizz

166. Romeo Effs – Founder & CEO, Lumorus

167. Rushina Shah – Founder, Insane Grain

168. Russ Shaw CBE – Founder, Tech London Advocates & Global Tech Advocates

169. Ruzbeh Bacha – Founder & CEO, City Falcon

170. Sally Coulden – Founder & CEO, Red Dog Glass Design

171. Sam Alsop-Hall – Founder, Clive Henry Group

172. Samit Biswas – Founder & CEO, Advatech Healthcare Europe

173. Sarah Bolt – Founder & CEO, Humankind Ventures

174. Sarah D'Souza – Co-Founder & COO, Jiva.ai

175. Sarah Dowzell – Co-Founder, Natural HR

176. Sarah Orecchia – Founder, Unbeelievable Health

177. Shachar Bialick – Founder & CEO, Curve OS

178. Simon Hay – Co-Founder, Firefly Learning

179. Simon Hornby – Managing Partner, Thornhill Consulting Group

180. Simon Thethi – Founder, Indicium Ventures

181. Sonya Bachra-Byrne – Director, AVIE

182. Sophie Eden – Co-Founder, Gordon & Eden

183. Stephen Coulson – Founder & CSO, P2i

184. Stephen Folwell – Founder, Muddy Trowel

185. Stephen Phillips – CEO & Founder, Zappi

186. Stuart Lucas – Exec Chairman, Asset Match

187. Taeje Park – Chairman, Kickstart

188. Teresa Clark – Founder, The Wellness Revolution

189. Theresa Burton – Director, Trillion Fund

190. Tim Brownstone – Founder & CEO, KYMIRA

191. Tim Le Mesurier – Founder and Managing Director, Greenbest

192. Tim Ringrose – CEO, Cognitant Group

193. Timothy Antos – Co-Founder & CEO, Kokoon Technology

194. Tobi Schneidler – Founder & Chairman , Bouncepad / Spotspot

195. Toby Moore – Co-Founder, Space Ape Games

196. Tom Carrell – Founder, Cydar

197. Trudie Fell – Co-founder & CEO, BelleVie Care

198. Yali Sassoon – Co-Founder & CSO, Snowplow.io

199. Yang Liu – Founder & CEO, JustWears

200. Zoe Rowswell – Co-Founder, Tern Eco

APPG for Entrepreneurship Digest: February 2023

“The way that government works must never stand still, but rather evolve to meet the challenges of the day.” So wrote Rishi Sunak, upon announcing last week’s somewhat unexpected Whitehall reorganisation. The Prime Minister carved the ‘E’ out of BEIS – establishing a standalone Department for Energy Security and Net Zero (DESNZ) – while fusing DIT onto what remained (in turn rendering it DBT). DCMS hung on to its acronym but lost ‘digital’ from its portfolio to the newly created Department for Science, Innovation and Technology (DSIT). 

Predictably, opinions on the reshuffle have been mixed. Critics have been quick to make ‘deckchairs on the Titanic’ references, or simply see the changes as cynical pre-election ploys. Supporters say that the change in focus is welcome and responsible, for exactly the reasons Sunak set out in his quote above. I’ll leave you to make your own mind up – but what isn’t up for debate is that the new Whitehall configuration clearly indicates what the Prime Minister sees as his key priorities. 

Many of the changes herald new opportunities/risks (delete as you see appropriate) for Britain’s entrepreneurs. DSIT perhaps represents the most intriguing development. We’re told it “will focus on positioning the UK at the forefront of global scientific and technological advancement.” By taking responsibility for our approach to R&D spending, decisions it makes will have knock on effects for innovators up and down the country. On this point, it already very much has a job on its hands – momentum is building behind campaigns which view planned modifications to R&D policy as a retrograde step. An optimist might think that having a Secretary of State dedicated to standing up for innovation will ensure the voice of Britain’s cutting-edge startups will be louder than ever around the cabinet table – we certainly hope so. 

The newfangled business department holds obvious importance as well – especially for those entrepreneurs who aren’t necessarily pushing the frontier of science, but nonetheless play a vital role in keeping the economy ticking over. To bring trade policy into the fold is not necessarily an original idea – Liam Fox, who was DIT’s first Secretary of State, has called for merging business and trade in the past – but it could pay dividends, given that we know exporting is a proven way to boost productivity among all sorts of businesses. By bringing trade officials and business officials into closer proximity, one would imagine those links can be strengthened, and headway can be made towards delivering on the Government’s target for £1 trillion of exports by the end of the decade.

Energy is of course a critical input to virtually all businesses, and as we’ve become painfully aware of over the past couple of years, it’s an increasingly expensive input too. The creation of DESNZ therefore, with a key focus on bringing down energy bills, should be welcome (indeed it seems to be the one change in particular which has garnered broad support across the political spectrum). Entrepreneurs will be hoping it succeeds in banging the drum for the rollout of more cheap, clean energy supplies – as well as new cleantech innovations, for those working on developing them. Here, however, it should be kept in mind that the big blocker to new energy infrastructure is more often than not our sclerotic planning system, as opposed to any other obstructive forces at play. Acknowledging this fact will be paramount.

The removal of digital policy from DCMS, and handing it over to DSIT, will also have profound implications for some of the country’s most trailblazing entrepreneurs. Over the last decade, tech startups have been a bright spot in the often lacklustre British economy – especially compared to their peers in Europe. But digital policy has not always seemed sympathetic to the ecosystem’s needs – see the debates about the Online Safety Bill for a vivid example. Whether it’s a fair accusation or not, a common critique of DCMS was that, because it had little in the way of spending powers, it developed an appetite to simply (over)regulate. Many in the industry are now cautiously enthusiastic that by moving digital into DSIT, policy might play a more enabling role – which will be crucial for the future success of the industry, not least as we get to grips with developments such as increasingly sophisticated forms of artificial intelligence.

Machinery of government changes are never a guarantee of genuine change. Even where departments are welded together, the age-old adage about their constituent parts continuing to operate in silos can persist (this argument was constantly levelled at the now defunct BEIS). A new name and a new Ministerial team can happen at the stroke of the Prime Minister’s pen, but the actual behind-the-scenes restructuring can take months. Nevertheless, this reshuffle gives the entrepreneurial ecosystem much to consider – and attempt to influence for the better – just as our APPG will do. 

A Small Favour

Over the last few weeks, we’ve been carrying out research in partnership with the Venture Capital Trust Association on tax reliefs for equity investment, and highlighting their importance to founders in the UK. We’re coordinating an open letter which calls on the Government to pass the necessary legislation to continue and update the SEIS, EIS, and VCT schemes. You can add your name to the hundreds of signatories who have already done so by clicking here.

Adviser Update

We will be hosting our first public event of the year on Wednesday 19 April, to launch a forthcoming report we have written in partnership with the Venture Capital Trust Association on the subject of tax relief for equity investment. It will be held in the House of Lords, and you can request a place here. 

The Entrepreneurs Network, our secretariat organisation, also has events on the horizon. On Monday 13 March, in partnership with Kingsley Napley, they are hosting a roundtable discussion in the House of Lords with Lord Billimoria of Chelsea, CBE, DL to discuss reforms to the immigration system to support the UK’s entrepreneurs. You can request a place here.

A few days later on Thursday 16 March, they’re partnering with the Small Business Roundtable, Enterprise Nation, Intuit and Federation of Small Businesses on the Entrepreneurship Exchange 23 – which will bring together small businesses, entrepreneurs, government leaders, and subject matter experts from across the globe. You can find out more and register here.

Then, on Wednesday 22 March, they are hosting another roundtable to launch a forthcoming report written in partnership with Enterprise Nation, looking at SMEs and international trade, with Mark Garnier MP – Member of the International Trade Committee – as the guest speaker. You can request a place here.

Campaign for Science and Engineering are hosting their Annual Lecture on Tuesday 28 February. Kim Shillinglaw, Chair of CaSE’s new Discovery Decade project, will share her reflections on the public’s relationship with science in the UK, and the urgency of forging a deeper and broader public connection to put research and innovation at the heart of the UK’s future. It’s free to attend, and you can register here.

On Thursday 2 March, the Enterprise Research Centre will hold their New Frontiers in Family Business Research Conference – bringing together researchers, decision makers, and family business practitioners to discuss current themes and challenges in the family business research field and practice, and to explore new priorities and avenues for research in 2023 and beyond. Again, places are free, but you’ll need to register here to reserve a spot.

The Centre for Entrepreneurs have opened applications for NEF+ – a 6-month programme for ambitious entrepreneurs to get the education, 1:1 mentorship/coaching and network to take their goals further. If you’re interested, be sure to register before the end of March, by clicking here.

In Parliament

In Topical Questions to the Business Secretary, Stephen Hammond MP raised the issue many entrepreneurs face about difficulty accessing finance, and asked what the Government is doing to make sure that access to finance is open to as many people as possible. Responding was the Small Business Minister, Kevin Hollinrake, who acknowledged the challenge of access to finance, but noted that “the Start-Up Loans Company has provided £1 billion of loans to around 100,000 businesses,” and that “40% of those loans go to people from a black, Asian and minority ethnic background.”

A debate on Non-domicile Tax Status saw views exchanged for and against abolishing the measure. Speaking in support of the status quo was Rob Butler MP, who said it is “vital that our tax regime is competitive and that talented entrepreneurs overseas see the UK as a country where their risk taking will be rewarded and where their commitment to developing their business will bring jobs to British people, strengthening our economy and generating in turn more tax that will pay for more public services.” Alex Sobel MP questioned whether abolishing it would render the UK less internationally competitive, noting: “Would this loophole happen in the United States of America? Would it happen in Canada, Germany or other jurisdictions? No, it would not. They require people to pay tax after a qualifying period. In the United States of America, that qualifying period is just one day.” 

Reacting to the creation of the Department for Science, Innovation and Technology, Anthony Browne MP mentioned that there are “reservations about the reform to the research and development tax credit, introduced to try to tackle fraud in the sector” and asked for reassurance that “the Government [is] still committed to supporting research and development companies while tackling fraud.” Responding, the Chancellor said the Treasury is “continuing to look at how we can support the R&D small companies sector without allowing that fraud to happen” indicating changes could be on the way. 

APPG for Entrepreneurship Digest: January 2023

APPG for Entrepreneurship Digest: January 2023

For many of us, the arrival of a new year might herald a fresh exercise regime, abstinence from alcohol, or the adoption of some other virtuous habit. I don’t know whether Rishi Sunak chose to set any personal goals for himself coming into 2023 (already being teetotal rules out Dry Jan for a start), but the Prime Minister lost no time at all in setting his Government five resolutions to get to work on. They are:

1. Halving the rate of inflation;

2. Growing the economy;

3. Reducing national debt;

4. Cutting NHS waiting lists;

5. Passing new laws to stop small boats.

Excluding the last ambition – where opinions divide sharply – I think it’s fair to say that few could dispute the intention behind these priorities. And, perhaps excluding the small boats objective again, they are all areas where entrepreneurs and innovation will be indispensable.

Sunak seems to acknowledge this fact. He devoted a good chunk of his speech to lavish praise on the importance of innovation – saying we need to put it “at the heart of everything we do.” He noted that it accounts for about half of Britain’s productivity growth in the last 50 years, while also helping to increase wages, and holding down the costs of goods and services. 

The Prime Minister then proceeded to set out the four cornerstones of his Government’s approach to ensuring the UK is the most innovative economy in the world.

First, public funding for R&D will be increased to £20 billion a year by 2024-25 – as was first set out in the Autumn Budget in 2021. This is certainly praiseworthy, especially given the fears that it would be an easy pot for the Treasury to raid. (Though critics will point out the £20 billion target was actually a watering down, from an original £22 billion a year goal.)

Yet while the Government can give with one hand, it can just as easily take with the other. At the Autumn Statement last year, reforms to R&D Tax Credits – a lifeline for many of the UK’s most innovative businesses – were announced. These changes were largely aimed at reducing the amount of fraud in the system, which is clearly an issue worthy of scrutiny. But some fear it risks making perfect the enemy of the good, and almost as soon as the idea was unveiled, startups were voicing their concerns. (If you haven’t seen it already, Coadec is also surveying startups on their use of R&D Tax Credits.)

Second, Sunak promised to seize “the opportunities of Brexit to ensure our regulatory system is agile and pro-innovation.” One needn’t be a dyed-in-the-wool Leaver to think that there are indeed pathways open to the UK now that it has left the EU to burnish its innovative credentials – especially in some of the most exciting and cutting-edge industries. At the same time, and without wanting to relitigate the debates of 2016, this is a slogan we’ve heard said a lot, without much meaningful action to date. Putting into practice some of the changes we’ve been promised should be a key goal for 2023.

Third, the Prime Minister observed how adequate access to finance is critical for fast-growing companies. It certainly is. Finance is the fuel which businesses need to grow. For many of the country’s most innovative startups – which might be breaking new ground, or be heavily skewed towards intangible capital – relying on external finance might be their only way of survival until they gain a foothold and begin to turn a profit as per any other ‘conventional’ business might. 

Partial progress on this agenda was already made when, also at last year’s Autumn Statement, reforms were made to the generosity and availability of the Seed Enterprise Investment Scheme. The Government also somewhat vaguely said that it “remains supportive of the Enterprise Investment Scheme and Venture Capital Trusts and sees the value of extending them in the future.” Encouraging, yes – but “seeing the value” of something and actually legislating for it are two very different things. Our secretariat organisation, The Entrepreneurs Network, has previously called for the sunset clauses on EIS and VCTs to be scrapped, and will shortly be publishing more research on the topic.

Fourth, Sunak spoke of his desire of “spreading a culture of creative thinking and doing things differently across every part of the UK.” This might prove his hardest aim of all. While governments aren’t entirely powerless to shape the economy’s spirit – for want of a better word – they can influence at the margin. Tax frameworks can be amended to motivate entrepreneurship, while regulatory landscapes can be updated to permit more experimentation, especially in emerging industries. Immigration rules can be fine-tuned to import new ideas and talent, and education systems can be improved upon to instil the skills necessary for the next generation of entrepreneurs.

Apparently, only 9% of people succeed in keeping their new year resolutions. With entrepreneurs still facing unprecedented uncertainty, they will hope the Prime Minister manages to stick to those of his which focus on shoring up the economy.

Adviser Update

The Entrepreneurs Network is hosting two events towards the end of this month. On 24 January, they’re convening a virtual roundtable as part of their Inclusive Innovation Forum to discuss the findings of the Start-Up, Scale-Up report, commissioned by the Labour Party and published last year. You can request a place here.

The following day, they will be holding another roundtable – this time in person – to launch and discuss their first report of 2023. Supported by Young Enterprise, What Applied Learning Really Looks Like examines the concept of applied learning, and this event will discuss the challenges of implementing applied learning more widely, and how policymakers can better support it. You can request a place here.

The Global Entrepreneurship Congress 2023 – which will bring together entrepreneurs, investors, policymakers and community leaders from over 200 countries – takes place in Melbourne, Australia from 1-4 May. Our friends at the Global Entrepreneurship Network will be there, and would like you to join the UK’s delegation.

If you are interested in a speaking opportunity, please complete this form. To register as a member of the GEN UK delegation, please notify Elaine Gold for a delegate’s code. More information is available here.

The Enterprise Research Centre is holding a Research Showcase event on 26 January. It’s a chance to discuss a range of new and ongoing research on themes including mental health, innovation, rural enterprise and internationalisation. It’s being held in person with lunch provided, and you can register here before 16 January to request a spot. 

And that’s not all from the ERC. On 2 March, they’ll hold their New Frontiers in Family Business Research Conference – bringing together researchers, decision makers, and family business practitioners to discuss current themes and challenges in the family business research field and practice, and to explore new priorities and avenues for research in 2023 and beyond. Again, places are free, but you’ll need to register here to reserve a place. 

Last but not least, Enterprise Nation began their year releasing some encouraging new research, which found 30% of UK adults are considering starting a business in 2023 – rising to 48% among those aged 18-24. Take a look at their findings in full here, and read a write up here.

In Parliament

Parliament has been in recess for much of the time between this and the previous digest – but there were still a handful of contributions to note. 

The Business Secretary, Grant Shapps, gave a written statement on the decision taken to end Help to Grow: Digital. This scheme gives discounts to small businesses buying certain digital technologies, but due to low uptake, the Government has decided to “refocus efforts towards other support mechanisms for small businesses, ensuring businesses get the backing they need in the most efficient and productive way possible.” Help to Grow: Digital will close to new business applications for discounts on February 2, 2023 – if you’re a small business owner, and think you could benefit from it, click here for more details.

Just before the Commons broke for Christmas, there was a debate on family businesses, and their contribution to local communities. Our Chair, Seema Malhotra MP, spoke during it, emphasising “the part that women play in family businesses,” and adding it “is important to make sure that we use language that reflects the work of women such as Anita Roddick, who set up the Body Shop, and so many other women entrepreneurs who run a family business.” She finished her intervention, however, by saying “family businesses are absolutely up against it. They have raised concerns about business rates, supply chain costs, access to schools, and the need for a stable tax environment.” But the Small Business Minister, Kevin Hollinrake, was keen to defend the Government’s record, noting the recent cut to Fuel Duty, support for energy bills, the reversal of the National Insurance rise, and new incentives for investment – such as the £1m annual investment allowance, which come into play this April. You can read the debate in full by clicking here. 

Later that day, a debate was held on entrepreneurs from ethnic minority backgrounds. Sir Stephen Timms MP began proceedings, noting that while eight of the UK’s 23 unicorns had minority founders, Britain’s ethnic minority community is significantly underrepresented in the business population at large. Also speaking in the debate was the Investment Minister, Nus Ghani, who agreed “on the importance of ethnic minority entrepreneurs and their valuable contribution to our vibrant business landscape,” and praised the “dynamism and resilience of ethnic minority entrepreneurs that they continue to adapt, and that they overcome so much, especially during covid.” She also acknowledged the challenges minority entrepreneurs often disproportionately face, such as access to finance, on which point she informed colleagues that “the Department for Business, Energy and Industrial Strategy is working with the Investing in Women code signatories and with trade associations to pilot data collection on the ethnicity of entrepreneurs applying for finance.” You can read the debate in full by clicking here.

Last of all, in a debate on the fairness of the tax system, Alan Mak MP welcomed the recent ‘Edinburgh Reforms’, and urged the Government to “adopt the same approach to R&D tax reliefs and capital allowances, so that our world-class entrepreneurs, start-ups and small and medium-sized enterprises can benefit from the same advantages.” Responding was the Financial Secretary to the Treasury, Victoria Atkins, who was “delighted to say that we very much support innovation and the critical work of our entrepreneurs, start-ups and SMEs, which is why we are setting the annual investment allowance permanently at £1 million from 1 April, and reviewing the research and development tax reliefs to ensure that, while we are rebalancing the rates of relief out of fairness to the taxpayer, we are also targeting that relief at the knowledge-intensive and innovation-intensive businesses that we all care so much about.” You can read the debate in full by clicking here.