Home' Trinidad and Tobago Guardian : April 12th 2015 Contents SBG16 INTERNATIONAL
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt APRIL 12 • 2015
February 19 was "Demo
Day" for 16 technology
start-ups in London. A
succession of Steve Jobs
wannabes bounced onto a
stage to deliver three-
minute pitches to venture
capitalists. English self-
deprecation was nowhere in evidence. One
team showed how it could compress online
videos by 50 per cent more than the compe-
tition, another how architects might be per-
suaded to use a virtual-reality system.
In 2013 more businesses were created in
Britain than in any year for at least a decade.
One lobbying group, Enterprise Nation, esti-
mates that last year s tally was even higher.
Many of these will be one-man or one-woman
companies, builders and public-sector workers
shaken out of their regular jobs by recession
Increasingly, though, businesses are being
started by the sort of ambitious, well-educated
folk who will end up creating jobs. Some reckon
that London has the most vibrant start-up
scene in Europe.
When the current Conservative/Liberal-
Democrat coalition government took office in
2010, it was obvious that the two engines of
growth Labour had relied upon, financial serv-
ices and an expanding public sector, were
sputtering. The coalition quickly declared its
intention to "rebalance" the economy from
the public to the private sector, from services
to manufacturing and from London to every-
where else. As Demo Day suggests, it achieved
one of those three aims.
The Conservative chancellor of the excheq-
uer, George Osborne, cut corporation taxes
from 28 per cent to 20 per cent and trimmed
the top rate of income tax to make Britain
seem more business-friendly. To encourage
innovators, barriers to entry were lowered in
industries such as banking and energy.
The coalition government also tried to tackle
two big corporate gripes: the reluctance of
banks to lend, after the financial crisis, and
a shortage of skilled workers. Vince Cable, the
Liberal Democrat minister for business, created
a British Business Bank, the equivalent of Ger-
many s famed Mittelstandsbank, to dole out
loans to small and medium-sized businesses.
The Treasury changed tax rules in an attempt
to encourage people to invest.
About 440,000 people started apprentice-
ships in 2013-2014, up from 280,000 when
the coalition came to power. All the main par-
ties agree on the virtues of these plans and
are trying to outbid each other in promising
Prime Minister David Cameron said that
he wants to fund 3 million apprenticeships by
2020, while Labour has pledged to create
80,000 "high-quality" ones a year.
The coalition government also tried to give
a hand to manufacturing industry. Export
financing is now more generous. The ugly-
sounding "high-value manufacturing catapult,"
set up in 2011, prods business, academia and
government to work better together. This is
part of a new chain of elite technology and
innovation centers trying to bridge the gap
between early innovation, a traditional British
strength, and industrial-scale manufacturing,
a familiar failing.
Whether all this has helped manufacturing,
however, is not clear. Its share of GDP has
stayed at 10 per cent for the past few years,
and what little export recovery has occurred
has been driven by services, not by manufac-
Businessmen tend to support the govern-
ment, whatever its complexion, more than the
opposition. The Labour Party has made that
seem intuitive, however. Not since Michael
Foot, in the early 1980s, has a Labour leader
had such a poor reputation in corner offices
as Ed Miliband has today.
Whereas his "New Labour" predecessors,
Prime Ministers Tony Blair and Gordon Brown,
courted the business vote, Miliband revels in
doing the opposite. He has picked fights not
only with unpopular companies, such as energy
firms, but also with the leaders of trusted
companies such as the pharmacy chain Boots.
He appears eager to intervene in markets and
add costs to businesses. As for Labour s pro-
posed "mansion tax" on expensive homes, the
party "could not have come up with a tax
more calculated to irritate businesspeople,"
one London businessman said.
The dwindling band of bosses still sympa-
thetic to Labour hope that shadow Chancellor
Ed Balls and shadow Business Secretary Chuka
Umunna will temper Miliband s instincts if
he becomes prime minister.
Then there is Europe, though. The ever-
more-Eurosceptic Conservative Party promises
a referendum on Britain s membership in the
European Union if re-elected, a plan that
strikes many business folk as unnecessary and
dangerous. One poll by the Confederation of
British Industry suggested that 71 per cent of
its members think that the EU has had a "pos-
itive impact." A recent poll from the British
Chambers of Commerce suggests that well
more than half of its members think a with-
drawal would "impact negatively" on their
Partly this enthusiasm for Europe reflects
concerns about immigration policy. Companies
want workers from continental Europe to make
up for skills shortages in Britain. Technology
firms have lobbied furiously for more software
engineers, for example.
Business people are not blindly pro-Europe.
They are irritated about how long it is taking
to complete a single market in services, in
particular. However, they loathe the uncertainty
that a referendum would generate. If there is
to be one, they say, get it over with as soon
@2015 The Economist Newspaper Ltd.
Distributed by the New York Times Syn-
The business side of the
Businessmen tend to support the government,
whatever its complexion, more than the opposition.
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