These are tough times for entrepreneurs. But, as someone who started up his own firm at the bottom of the last recession, I also know that if you can make it now, you can make it any time. That’s why we need to encourage more people to become entrepreneurs.
I don’t underestimate the problems. As the Global Enterprise Monitor’s annual report shows, total entrepreneurial activity in the UK has fallen, down from 7.7 per cent in 2001 to 5.5 per cent today. We are falling behind both our international counterparts in the G7 and newer economies including China, India and Brazil.
Part of the problem is that the Labour Party doesn’t understand business. It finds it difficult to accept that government doesn’t create wealth. Business creates wealth and that means ministers should refrain from tinkering and meddling or from picking winners. The government’s role is to provide a stable, long-term framework and to then free enterprise from needless red tape, over-complex tax laws and allow businesses to invest in and grow their firms. The Conservative Party is busy finalising its agenda for business. But let me set out three areas in which we want to be a change for good.
First, to help more people work for themselves. I will be leading a three-month research and consultation programme to see how we can provide a practical, focused approach to expanding mentoring and supportive finance for startups. Not another bureaucratic programme run directly from Whitehall but an enabling framework, which will build on best practice and ensure we have entrepreneurs helping other entrepreneurs.
Second, a Conservative government would simplify the tax system and, as a result, cut the headline rate of small company corporation tax from 22p to 20p. Those retained profits will then be available for entrepreneurs to invest, at a crucial time.
Third, we will abolish tax on new jobs created by new businesses in the first two years of a Conservative government. New businesses won’t pay employer national insurance contributions during its first year, on the first ten employees it hires. This will make it both cheaper and easier for new businesses to grow and it will help us tackle the growing numbers of unemployed.
Now more than ever, we need more entrepreneurs. And we’ll be giving them the best chance to grow their businesses.