Some MPs make a decent job of engaging with the ‘small business community’, regularly making the effort to learn about how companies work and what Government policies have helped and hindered their progress. But unfortunately it seems that many are totally oblivious.
Research out today from the think tank The Entrepreneurs Network showed that around half (49%) of MPs were unaware of the Seed Enterprise Investment Scheme, which offers tax relief to those who fund new businesses, and 44% hadn’t heard of Entrepreneurs’ Relief, which lets company founders pay less capital gains tax when they sell a business.
More than a third (38%) hadn’t heard of the Business Growth Service, the major initiative to support growing companies, that brings together mentoring schemes, funding and export advice. The report said that Labour MPs were particularly unaware of the policies (perhaps unsurprisingly), but a substantial number of Conservatives were also oblivious to their own Government’s schemes.
‘It is concerning that MPs are not as well informed as they could be about important government schemes to support UK entrepreneurs,’ said Hollie Gallagher, head of entrepreneurs at Bircham Dyson Bell, a law firm that helped produce the report. ‘Fast-growing small firms are vital to our economy: they generated 36% of UK economic growth between 2012 and 2013 and created 68% of all new jobs.’
The report also looked at how politicians from the two major parties differed in their favoured ways to support entrepreneurs – with entirely predictable results. While Tories were particularly keen on cutting regulation and taxes, Labour MPs said they wanted to spend more on business support and improving skills, and to make it easier to hire from abroad.
Of course while it's important that the Government engages with and understands entrepreneurs, there's a lot to be said for letting business leaders sink or swim on their own merit. Government efforts to 'pick winners' have often produced distorted and inefficient results in the past, so politicians should be careful not to be too heavy handed.