Telling bosses how to do their jobs won’t make Britain profitable

Why do we have two ears but only one mouth? So we can listen twice as much as we speak. All that is required for the government to achieve growth is to take on board what business leaders are already loudly telling it — and talk less.
The solution, of course, is to attract talent, stimulate jobs and encourage wealth creation — nothing new to see here, readers. But, as the budget looms, I see few signs of anything being introduced to achieve that.
In fact, much of what has been leaked to the media, or declared by doom-laden ministers, could have the opposite effect. The role of government is to create the infrastructure and security for business to flourish. But it looks, instead, like this administration prefers to tell business people how to run their companies.
What should it do? How can it help entrepreneurs and big business to invest, spend money and grow the economy? First, don’t make it any harder to employ talent. Don’t introduce new employment laws that take us back to the 1970s, where recruitment policies killed the economy. I love the punk, flares and disco balls of that era, but I’d rather never see union-esque laws, nationalised businesses and high taxation again.
Immediate and material damage to confidence has been done with talk of four-day weeks, the right to work at home and “day one” workers’ rights. Many companies are not hiring in the UK if they don’t have to, and that’s not a “business people” problem; it’s an “anyone who wants a job” problem. What I have seen so far is a disincentive to hiring people. It is not helpful that the business secretary appears to have practically no business experience.
Second, the government should be brave and hurry up. Tony Blair talked long ago about his “big regrets” over his inability to move more quickly to reform public services.
We are already three months into a five-year term, so let’s have fewer press releases and worrying about headlines, please. Bite the bullet. If you are confident you have solid plans for growth, put the PR efforts to one side and get on with it. Easy to say, I am sure — if I were in the cabinet, I too wouldn’t want to read nasty tweets from people who disagree — but if ministers had the guts to take quick, tough decisions that have positive outcomes, their reputations would be enhanced in the long term.
Third, negotiate. If you are going to give striking train drivers an above-inflation pay rise and the right to a four-day week, get something in return. It sets a dangerous precedent if you give, but don’t also get, when there are six million people employed in the public sector — more than half a million in the civil service alone. Caving in to unions without a quid pro quo is not a pro-business signal.
Fourth, diversify the economy and deregulate the City. There is no point in having the “safest graveyard”, a phrase I love from the former Conservative City minister Bim Afolami. Regulators need to loosen their grip on the crucial financial services sector, which accounts for about 12 per cent of economic output, employs more than 2.5 million people and contributes tens of billions of pounds in tax revenue. That said, the 2008 financial crisis had a significant impact on the UK, in part due to our economy’s dependency on the sector.
Fifth, as part of necessary diversification, we must continue to nurture the UK tech scene — and, in particular, scale-ups. Start-ups are the lifeblood of innovation but scale-ups are their successful, crucial older sisters — the larger, more established but still young companies that are the listing candidates and acquisitive companies of tomorrow — like my business, EnterpriseAlumni. That all adds up to tax revenues, jobs, global influence and valuable intellectual property.
Sixth, remember small businesses — not because it’s kind but because more than 80 per cent of UK businesses are small and medium-sized enterprises (SMEs) and they will never grow with burdensome state intervention. What the government fails to understand is that the prospective employment laws — and, particularly, the potential increase in employers’ national insurance — give SMEs a reason to keep hiring to a minimum. When the budget red box is opened next week, give them some relief; it has been a hard few years.
Finally, I have to mention the impending rise in capital gains tax. I can speak of the impact on entrepreneurs as someone who walked away from the security of a corporate job in my twenties and, two decades on, is taking risks every day to build a business. If I successfully sell one day, rumour has it that I may soon have to pay double the tax on the exit despite years of intense risk. What message are we being sent about motivating people to take those risks and put in decades of often unrewarded slog … if the reward at the end is now being severely diminished?
Labour campaigned on a pro-growth agenda and this budget is the opportunity to show that it means business and to harness the benefits of that growth for the UK. That agenda currently feels like it is more slogans, less about nous. I hope I am proved wrong on October 30.
Emma Sinclair is chief executive of EnterpriseAlumni, a British businesswoman and entrepreneur