The chancellor’s adviser on entrepreneurs has warned that the machinery of government has already been “frozen for six weeks”, and cautioned that the change of prime minister amounts to a “colossal waste of energy” at the very moment British business needs decisions, not delay.
Alex Depledge, the serial entrepreneur appointed by Rachel Reeves as an adviser last June, said she feared Whitehall would remain stalled for many months while a new political leadership beds in.
“We are going to lose six months, at best, probably a year once you start to brief the new ministers coming in. It is just a colossal waste of energy. The British people deserve better,” she told an audience of business leaders at The Times Entrepreneurs Network Live event in London.
Depledge, co-founder and former chief executive of the architecture technology platform Resi, made her comments a day after Sir Keir Starmer resigned as prime minister, clearing the way for Andy Burnham to become the next leader. The future of Reeves as chancellor remains unclear.
The intervention is the latest warning from the business world about the cost of prolonged uncertainty in Westminster, a theme that has dominated boardroom conversation ever since founders and MPs began cautioning that Britain’s tax system is, in effect, telling entrepreneurs to leave.
Depledge said it was now very difficult to make meaningful progress inside government. “It is about carving out what we can get done within the parameters in which we are allowed to operate,” she said. “There is some stuff we can’t do any more, but there are other things you can.
“My biggest fear is that I have to spend another year trying to get new ministers and new people to understand the burning platform and the need to move at speed.”
Separately, Gareth Quarry, a Labour donor, investor and long-standing director of the legal recruitment consultancy SSQ, called for Wes Streeting to become the next chancellor.
Quarry, a former Conservative donor who gave £150,000 to Labour before the general election, said: “Wes would make an excellent chancellor because the City wouldn’t be spooked by him. I’m a businessman with a large number of businesses. I also hold significant assets in gilts.”
He said Streeting would “command the respect” of the City, adding: “And that is going to be fundamental as to what comes next. That’s assuming it’s not going to continue to be Rachel.”
Another Labour donor and business leader, speaking confidentially, said Ed Miliband was “too ideological” and “clearly just doesn’t understand what energy security means”. They added that Reeves, who although had “made mistakes, would not be a bad outcome” if she continued as chancellor.
The succession debate lands against a backdrop of mounting anxiety among wealth creators, with Reeves repeatedly warned against “anti-enterprise tax rises” and growing evidence that Britain is facing one of the largest exoduses of millionaires of any major economy.
Also speaking at the TEN Live event, Harry Stebbings, who has invested more than $550 million in promising young companies across a series of venture capital funds and is founder of the popular tech podcast 20VC, said that, if asked, he would advise Burnham not to raise taxes on investors and entrepreneurs.
“Don’t fing bring in a wealth tax. We’ll all fing go,” he said. “I have looked at Monaco and it is not as good as Dubai. Probably Milan or Athens. Touching a wealth tax would really kill the investor side and the founder side.”
His warning chimes with the Institute for Fiscal Studies, which has cautioned that the more an annual wealth tax is concentrated on the very wealthy, the more it would incentivise them to leave, or simply never come to, the UK in the first place.
Stebbings, who has previously argued the UK should adopt a zero per cent capital gains rate for global talent, said the priority should be attracting and keeping the people who build companies.
“The most important thing is that we get amazing talent-building [companies] in the UK. Let’s give unbelievably easy access to high-talented people to come and build in our country. Income tax free for the first year, why not?
“If you are an amazing entrepreneur and want to build your company in this country we’ll give you no capital gains for the life of your business. We could be so creative, and this is the crime of politicians, that none of them has had a proper job. When it comes to creativity and figuring out a solution that works for the country, it is ‘let’s go back to a think tank’.”
For Britain’s founders, the message from the room was blunt: the country cannot afford to spend another year with its hands tied while Westminster works out who is in charge.