George Osborne sounded a bright note in the House of Commons today when he announced an extension to the Start Up Loans scheme to 50,000 more entrepreneurs, providing loans of around £2,500 to help get ideas off the ground.
He then spoke about the frozen business rates, extending rate relief, and introducing a Patent Box to cut corporation tax on profits from patents by 10%.
It all sounds terrific, and had the Tory backbenchers hollering gleefully at their cringing Labour counterparts in Britain’s most expensive classroom, but once the rosy glow of a rallying speech fades from Osborne’s still-quivering cheeks, people will begin to wonder how much gumption the government really has to try and make UK startups into successes.
The coalition has played its role in trumpeting Tech City well, limiting itself to being a cheerleader rather than becoming some deus ex machina, plucking firms from obscurity to turn them into greats.
But it has failed to commit itself to vital infrastructural endeavours required to make Tech City competitive with its American cousins.
While Cameron et al spend a fortune on HS2, not even London has ready and ubiquitous access to superfast broadband, something essential for the development of apps and digital platforms so many entrepreneurs are engaged in.
Its attitude towards funding needs an update, too. While it’s pushed money into VC funds via the British Business Bank, £250m won’t go far when funding late-stage startups.
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It should be considering tax breaks for investors in peer-to-peer lending platforms, and encouraging investors to look at equity crowdfunding platforms (similar but not quite the same as peer-to-peer) like Crowdcube and Seedrs, which the FCA is currently trying to regulate, a move which may end up barring anyone who doesn’t have millions of pounds.
