comment & policy
Steve champions long-term thinking and policies to unlock the potential of businesses in the UK.
PRIVATE AND FAMILY BUSINESSES
“We need to empower Breakthrough Britain by fostering long-term growth in the private sector”
Private businesses are the backbone of long-term growth and central to the UK’s economic success, generating jobs, wealth, innovation, and taxation.
Despite their vital contribution to the UK economy, private and family businesses are often overlooked by policymakers, who are mostly focused on start-ups and scale-ups.
The UK falls behind its international counterparts in growing and maintaining family businesses. We have the potential to become world leaders in this space if we can help first-generation family firms to successfully transition to the next generation and foster long-term growth.
To do so, the UK Government needs to do more to nurture long-term ownership of companies. If we fail to do this, we effectively discourage homegrown growth and encourage businesses to sell out.
We must find a way to not only start companies and assist them in the scale-up process but to embrace them when they are at the critical stage of growth, often around the £30m revenue stage. Mid-sized businesses are the sustainable big businesses of the future. We should encourage them to get to that breakthrough moment and scale, not to exit.
A pro-business policy environment should give every British business a shot at growing at scale.
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• A more cooperative relationship between the Department for Business and Trade, and the Treasury.
• Develop policy frameworks that understand and support the unique long-term investment timelines for family businesses.
• Raise the eligibility threshold for the Enterprise Investment Scheme to companies with 499 employees.
• Government commitment to develop a stand-alone growth and support strategy for mid-sized businesses, addressing their unique challenges and opportunities.
• To support smoother succession planning, the government should align BAHR qualifying criteria with the existing Business Property Relief (BPR) rules.
TAXATION FOR LONG-TERM GROWTH
“I believe in taxation as a force for good – to help deliver growth, enhance public services, and create opportunities”
It is time for fresh thinking on the role of entrepreneurialism and taxation policy in the UK.
The UK’s tax system motivates the sale of companies rather than fostering long-term ownership, which would generate more wealth and jobs for the economy.
Whilst we are seen as having progressive tax systems for entrepreneurship with EIS, all the incentives focus on the early sale of these businesses.
This short-termism in the UK's approach to taxation increasingly puts us at a disadvantage compared with other countries. Britain’s underperformance is a policy issue.
We need a new debate about tax as a “force for good” and how we can use tax to incentivise and disincentivise behaviour to allow the scale and number of large businesses in the UK to increase, providing greater employment, GDP and income from tax.
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• Create an equal playing field for debt and equity financing.
• Maintain Business Property Relief (BPR) in full to provide private businesses with the stability to plan long term.
• Initiate a review of the rules around joint ventures and Inheritance Tax reliefs to ensure they encourage investment decisions that support economic growth.
CAPITAL MARKETS AND INVESTMENT
“Time to invest in Britain to build the big companies of the future.”
Investing in Britain should be the common-sense policy of British businesses but our investment rate is nowhere near our competitors.
In the first half of 2023, data from the ONS shows £19.2bn was invested in acquiring UK companies. Taxation and capital markets should incentivise investment not sale of growing UK companies. We must unlock the potential of pension funds – they are too risk-averse, too conventional and too small.
Our peers use their pensions not only as a safety for the present but also to build the future. Right now, our pensions are doing the exact opposite – they are more interested in the big players of today, not of the future.
The UK needs to build a private and public market of the future allowing us to compete on the world stage.
UNLOCKING REGIONAL GROWTH
“To unlock growth across Britain, we need to devolve power.”
Growth and human potential depend on skills, access to opportunity, reliable public services and a path to progress.
For a country with a rich democratic history, Britain has become too centralised around Whitehall, causing underperformance across the country.
Pushing political power away from London is the first step to unlocking growth across Britain.
Devolving power to metro mayors proved that locals know better. In West Midlands, where my company is a powerful business, Andy Street has made a great difference.
Giving local officials more power will make them only more effective.
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• Devolve decision-making powers to metro mayors and local officials, who know the local economy and needs.
PRIVATE BUSINESS COMMISSION
Steve chairs the UK’s Private Business Commission. Launched in Spring 2024, the Commission aims to identify and recommend reforms to significantly improve the business environment in the UK so that businesses can thrive and scale up domestically.