The Liberal Democrat shadow business spokesman says his “focus is setting business free”, though it’s also clear he believes the UK’s banks should enjoy rather less freedom.
The former CEO of Champneys and founder of Cliveden wants to help entrepreneurs. While he believes “we are a nation of innovators and inventors”, we’re not great at enterprise. “I don’t think we’re culturally averse to being entrepreneurs,” he explains. “I think our structure makes it quite difficult.”
And that’s something government should address, he says, with access to affordable capital top of his hitlist. Thurso is currently developing plans for “local enterprise funds” that would bring together groups of privately wealthy individuals in a particular region to invest amounts of around £50,000 to £125,000 in local start-up and early-growth companies – and provide mentoring into the bargain.
Because investors would own the funds, overheads would be small. The intention is to appeal to their sense of regional loyalty, and also to spread capital around the country and dilute the focus on London.
The funds would be the first step on what Thurso dubs “a ladder of enterprise”. The next rung would be the creation of regional stock markets. “The idea is that you would provide a mechanism for providing equity into companies,” he says. “The current regulations are such that you have the full weight of market regulation. I think that can be simplified.”
Thurso warns against the potentially “catastrophic effect” of withdrawing economic stimulus measures too soon, particularly in terms of unemployment: “We have three factors here – the reversal of quantitative easing, the removal of the VAT stimulus and a 17 per cent-plus drop in capital expenditure because the government, quite rightly, pulled forward shovel-ready projects. There is a real risk of a double dip.”
He adds the Lib Dems strongly support the separation of retail and investment banking operations – the narrow banking advocated by Bank of England governor Mervyn King. “You’ve got great big banks where you’ve got all the protection provided by the state for utility banking carried over to the risky side, and all the risk-taking culture that has seeped into commercial banking. It’s the worst of all worlds.”
Clegg recently called for banks to be subject to a “super-tax” – a premium rate of corporation tax – on their profits for a number of years, pending the removal of state support from the financial system and the introduction of more competition. But isn’t there a risk that such moves risk undermining the UK’s financial services industry – and therefore our competitiveness?
Thurso acknowledges the danger of over-reacting, but rejects the proposition that “all you’ve got to do is get financial services back to where it was and the world is sorted”. He explains: “I don’t want to hold the City back in the slightest, but given that the nation is now sitting on a potential liability of over a trillion, we have a right to ask if this is a price worth paying for that decade of boom. I would argue that it isn’t.”
Thurso says the Lib Dems would like the headline rate of corporation tax to come down by removing some of the avoidance measures, though he’s rather vague on the specifics. “If you look at the FTSE 100, the headline rate is 28 per cent but I think the average is about 21,” he says.
Thurso says the Lib Dems want a “progressive and fair” tax system that places far less pressure on those on the lowest incomes. He argues that taper relief on capital gains tax, which was abolished and replaced with an entrepreneurs’ relief by Alistair Darling in 2008, was “a massive mistake in the wrong direction”.
He says the Lib Dem tax plan is straightforward: “If you earn £10,000 or less, you just don’t pay tax. Obviously that has to be paid for. We suggest a rebalancing of the tax structure so the people at the top end pay more. “The definition of an unfair tax is one that I pay; the definition of a fair tax is one you pay. I think you have to look at the mix.”
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