George Freeman MP: George Osborne is becoming the entrepreneur’s friend
George Freeman is Conservative MP for Mid Norfolk. Follow George on Twitter.
‘Every problem is an opportunity’ is an expression beloved of entrepreneurs. Creating value by spotting the opportunity in a problem is what entrepreneurs do. There’s nothing entrepreneurs like more than big established businesses failing to innovate fast enough and failing their customers. As Britain seeks to tackle this historic crisis of debt and structural deficits driven by Big Government, damaged banks and uncompetitive and unreformed public services, we badly need to unleash the entrepreneurial mindset. We can’t borrow our way out of the debt crisis. We will need to trade our way out by selling to the fastest growing global markets the goods and services that this country does best. We need our entrepreneurs like never before.
Having come to Parliament after a 15 year career in start-up venture capital helping entrepreneurs build some of the fastest growing businesses in the technology sector, I’ve seen first-hand how the entrepreneurial mindset, empowered by new technology, an increasingly impatient modern consumer and a spirit of insurgency can transform whole markets.
We need to unleash that spirit of enterprise in, and on, the UK. Across the public and private sectors we need to release a new entrepreneurialism: empowering citizens and consumers, and the entrepreneurs who champion their needs, to drive innovation, reform, competitiveness and aspiration across our private, and public, sector.
Whisper it quietly, but in George Osborne I believe we are seeing a Chancellor who is beginning to be seen as the Entrepreneur’s Friend: the man who laid the foundations for an entrepreneurial recovery which rescued Britain from the abyss. In his commitment to globally competitive corporation tax he has recognized that Britain is in a competitive market for business. In his progressive personal tax reforms (cuts for entrepreneurs and strivers) he has sent a strong signal that Britain backs wealth creators. In creating the OBR and appointing a Canadian reformer to the Bank of England he has shown the commitment to transparency and reform that gives entrepreneurs confidence. And in championing from the Treasury the deep reforms to public sector pensions, welfare, and Whitehall needed to show that Britain is getting to the root of the problem he is building a platform for an entrepreneurial recovery.
And how we need it. We should be in no doubt the crisis facing Britain could make or break us. If we fail to tackle the underlying causes of the structural deficit (Public sector pensions, the Welfare State and the cost of the NHS in an ageing society) and fail to break open the stranglehold of Big Government, Big Banks and Big Business which too often crowd out the insurgent force of enterprise, we risk continuing the decline into an older, poorer, stagnant public sector dominated economy.
So, we must treat this crisis as an opportunity. The unwinding of Labour’s consumer boom fuelled by cheap credit, mass immigration and Government spending is an opportunity for the country to embrace the real reforms we need to grow a sustainable economy in today’s global enterprise economy. If we can get a grip on public finances, reform our public services (especially the Big 3 driving the structural deficit: NHS, Welfare and public sector Pensions) and invest in our knowledge economy, we can unleash an entrepreneurial nation to trade its way out of debt by selling to the fast growing emerging economies of the world, beyond the sclerotic Eurozone.
Governments in recent times have started to look like the sleepy big companies my start-ups used to go after: top heavy; corporate; remote from the day to day needs of their customers; focused too much on relations with investors and financiers at the expense of the core business; and slowed down by layers of technocratic management – and the professional jargon that goes with it. We need a dose of small business culture in our corridors of power: straight talking; crystal clear defining mission; a few clear specific goals which everyone is focused on and a culture of rewarding successful delivery. It’s the defining and common theme of the Ministers from the Thatcher Governments. Whether ‘wets’ or ‘drys’, they had a directness and messianic zeal about them which we need to rediscover.
The real debate we need to be having isn’t about the difference between Balls spending plans and Osborne’s. No serious commentator thinks that borrowing and spending a few billion more quid is going to lay the foundations for sustainable recovery. Plan B stands for borrowing, and for a Shadow Cabinet pitifully bereft of ideas on how to tackle the real crisis of competitiveness and structural public finance deficits holding us back.
We don’t have any serious choice but to stick to Plan A. The real debate is about the pace and extent of our commitment to the radical reforms needed to unleash the enterprise economy we need to restore out nations prosperity.
The Chancellor’s admission in the Autumn Statement that the Government is unlikely to hit its original target of eliminating the deficit by the end of the Parliament has triggered some to question the Chancellor’s strategy. Some have said that there was ‘vanishingly little to choose between Balls and Osborne’s approaches to economic management’, that too little was being done to deliver savings, support infrastructure or promote Britain’s trading advantages with the emerging world, and that doubts about the Chancellor’s lack of business experience were threatening our recovery.
I disagree. Chancellor Osborne may not have started a business. But the entrepreneurs he needs to inspire to come and start them here are beginning to recognize someone inside Government who is on their side.
Gradually it is becoming clear at its core “Osbornomics” consists of 3 key planks:
- Credible Public finances to secure low interest rates
- Radical ‘progressive’ tax reform to support enterprise and working ‘strivers’ and break welfare dependency
- Investment in the infrastructure (skills, sciences, schools and communications) which underpins our competitiveness in the global economic race.
As an entrepreneur I believe this is the right – the only - approach. And entrepreneurs are beginning to get the message.
The evidence suggests this is working. 1.2 million new jobs have been created in the private sector since the election – over double the number lost in the public sector. 2011 saw more new businesses start-ups than any year on record. In Q3 of this year we moved out of recession with stronger than expected growth figures. Over 600,000 apprenticeships have been created. In the Bio-Pharmaceutical “Life Sciences” sector alone (in which I used to work) over £1billion has been raised in 5 new Early Stage Start-up Venture Funds this year alone.
Tight control of public finances and Whitehall waste is earning the credibility keeping interest rates down. Radical reforms of Welfare, Education, and public sector pensions are getting the deficit down. Fair and progressive taxation (cuts for businesses, entrepreneurs and strivers, rises for the wealthiest and evaders) is rebuilding a sustainable revenue base on which to pay for the public services of tomorrow.
We need to be selling the goods and services we do better than anyone else to the fastest growing parts of the world outside the sclerotic Eurozone. Modern Governments have to think more like modern businesses, constantly looking at the increasingly globalised markets we operate in and asking where we fit in. Little Britain needs to think more like an entrepreneurial start-up, looking for every opportunity to export into new markets, and less like a mega corporation relying on its historic business dominance. Increasingly we will have to live on our wits – the Knowledge Economy - selling our world class expertise in science, R+D and innovation in key markets like the Life Sciences.
Contrary to many expectations - including my own coming to Government from a business career in innovation – Chancellor Osborne has done more in the last two years to set out a coherent programme for economic renewal and competitiveness based on the UK Knowledge and Innovation Economy than many dared dream of. Defining a New Model modern Conservative Industrial activism, he and David Willetts have won plaudits in industry for their commitment to support our science, and R+D base, innovation and new business sectors, despite the constraints on the public finances. Last week the Chancellor announced another £600m for Science, including £100m for a new UK Cancer Genomics project with the potential to catapult Britain into the lead in the global race for genetic medicines - the new frontier of global biomedicine.
I was in Cambridge last Monday with the PM and David Willetts launching the new UK Genetic Medicines hub, which will bring together our world leadership in genetic s, superfast computing, and health informatics (the NHS is the worlds most valuable repository of anonymised health data) to help put Britain in the forefront of the emerging biomedical revolution.
The Cambridge University / Addenbrooks NHS Teaching hospital biomedical research campus is now the largest such campus in Europe. Cranes are busy at work building the laboratories and business units which will power the UK and world economy of tomorrow. Companies are being formed and hiring fast.
This is the frontier of the new knowledge and innovation economy which Britain can lead the world in.
Osbornomics is beginning to lay the foundations for its long term success.
The real question now is whether we have the courage to drive through the next wave of reforms to public services, tax cuts for entrepreneurs and strivers and difficult reforms to the welfare state and public sector finances to inspire the confidence of global entrepreneurs to come and back us.
We don’t need a Plan B. We need to put the + in Plan A.