I met a successful entrepreneur the other day who told me he was on strike. He built up a good company, ran ir for many years, and sold out. He is young enough, energetic and wise enough to be able to run another good business. He has no current intention of doing so. He finds the tax and regulatory background now too hostile. He asks, why should people like him bother when the government is so keen to pile ever more burdens on them? They accuse him of being rich. They don’t encourage him to work hard. They just see his past success as something to raid to pay for their mistakes.
Some people have enough money to be able to live by just investing their cash in portfolio investments. Some even have enough money to be able to stay in the UK and pay all the taxes. Others are now leaving. One of the most important sources of new funds and management talent to create and build new businesses and to turn round old businesses is the talent pool of people who have done it before and made a go of it. They think income tax is too high. CGT has been changed against them, regulations have multiplied and employing people has been made dearer by National Insurance hikes.
We need an entrepreneur’s package, so more stay here and more invest and work again here. We need tax rates and regulatory burdens that still make it worthwhile to accept all the aggravation of running a business. As my contact on strike said, he remembers what hard work it was running the business. He felt very responsible for all the people working in it, for the quality of the product and for the customers. He did not wake up every morning dreaming of great riches. He woke up every morning thinking of the next problem he had to surmount to keep the jobs and keep the clients happy. If you are fighting the government at the same time, it can be enough to put people off doing it again. We are going to need all the entrepreneurs we’ve got – and more besides – if we are going to earn our way out of this debt crisis.