Britain’s fastest growing companies want Rishi Sunak’s new Conservative administration to focus on growth that does not damage the environment, and aren’t interested in the benefits brought about by cutting EU red tape, according to the results of a new poll gauging the political and economic priorities of start-up and growth-stage business founders.
The poll, conducted by equity crowdfunding platform Crowdcube, consolidates the views of businesses that have raised on the platform and are part of Crowdcube’s broader ecosystem, including the founders of Chip, Mr & Mrs Smith and Grind.
The top concern for the businesses community is the renewal or replacement of the EIS and SEIS schemes beyond 2025, a policy announced as part of September’s fiscal event, and not reversed in the subsequent revisions made by Chancellor of the Exchequer, Jeremy Hunt. The renewal of the scheme, which uses tax breaks to incentivise investment into entrepreneurial companies like those consulted for the poll, was chosen to be a ‘top three’ priority by over half of businesses.
Subsidised training and upskilling initiatives is another popular idea, with more than a quarter of businesses saying they would like to see the government introduce more supply side measures of this nature to boost productivity.
However, despite this desire for growth and productivity, safeguarding the environment is paramount to fast-growing businesses. The second biggest priority behind extending EIS, was found to be greater incentives for investment that does not harm the environment, a policy that was in the top three priorities of 53% of the founders surveyed.
This concern for the environment among the innovative businesses extended to the support of policies that could harm their business model, as well as help it, with the poll finding that nearly a quarter support the idea of a carbon tax on their emissions.
Darren Westlake, CEO and co-founder of Crowdcube, said: “The founders who took our poll are the future of British business. As their companies grow, they will employ more people, create more wealth and contribute more to our economy than almost any other type of company.
“What’s clear is that while the short-term bottom line boosting policies promoted by the previous administration are important, they are far from paramount. Founders would rather see the economy managed in a way that is socially and environmentally sustainable, than run with a flash in the pan, growth at all costs mindset. In the development of successful, exciting policies like the Futures Fund, Rishi Sunak has already demonstrated a capacity and enthusiasm to support our sector and its aspirations. We hope he retains that mentality as he takes on the top job.”
Crowdcube’s poll also found that of the 50+ founders questioned, the majority are indifferent to Hunt’s decision to reverse the tax cuts that were announced in September’s fiscal event. Just 8% support a reduction in, or removal of, the top rate of income tax, a flagship policy of the original mini-budget.
Similarly, the freeze in corporation tax initially touted by Hunt’s predecessor was not, and is not, a major priority of the start-up and growth stage sectors’, with support from just a quarter of respondents.
Founders are also sceptical about the potential benefits brought about by the UK’s departure from the European Union, with just 4% wanting the government to prioritise reviewing the left over EU regulations in an attempt to cut red tape.
David Abrahamovitch, CEO and Founder at Grind, said: “You only need look at the number of sector defining scale-ups that this country has produced over the past decade to see why it is an aspect of business at which the British are genuinely world leading. But with the economy looking as if it will get worse before it gets better, we need to have the required support from policymakers that will incubate us from these turbulent times without upsetting the entire economic apple cart.
“Despite the markets’ reaction to recent policymaking, some of the individual actions have been sound. The energy price cap will keep many businesses afloat, and the reversal of EIS will enable businesses across the country to attract the necessary investment to help them continue to grow. Crowdcube’s poll shows that the majority of my colleagues and competitors in the scale-up sector agree with me. What worries us, is the governments current apathy towards climate change – the single greatest issue our planet faces. I hope the people responsible for this month’s announcement listen to us on this, given the essential role we’ll play to help Britain grow.”
The poll found the start-up and growth stage sector to have an unenthusiastic view of its relationship with the government in recent years. Just a fifth felt previous administrations were a net contributor to the UK’s innovative business landscape, compared to 35% who felt they were a net detractor.
Stephen Crosher, CEO & Co-Founder, RheEnergise, commented: “The UK government is dealing with an unenviable in-tray. However, these fiscal and geopolitical challenges have brought forward the urgent need to pursue policies that provide low-cost energy to consumers, deal with energy security, and tackle climate change. Renewable energy is the lowest cost form of generation by some margin, and the addition of energy storage would still deliver energy at rates significantly below current prices. The action of deploying renewables with storage would obviously help the country, consumers, and businesses and in turn the government itself. There are some simple things that need to be done. We need to lift what is an effective moratorium on onshore wind, reform the planning system and use long duration energy storage to provide firm secure power from renewables, thus boosting the economy, making us richer and providing significant energy independence”
UK’s growth stage sector urges government to ‘go for green growth’ amid tax & Brexit indifference