Two wrongs don’t make good policy
GOVERNMENTS like picking winners. The trouble is, they aren’t very good at it. But it’s much easier to put others’ hard-earned cash on the line than your own. And this government has been at it again.
Last week, Vince Cable launched GrowthAccelerator, a new £200m three year programme to try to “help up to 26,000 of England’s brightest businesses achieve their ambition and potential.” And later today Lord Young of Graffham, the Prime Minister’s Enterprise Adviser, will launch a new initiative to provide StartUp Loans to 18-24 years olds.
But just because governments aren’t good at running their own balance sheets doesn’t mean they are powerless. In fact, it’s these powers that restrict economic growth. In Intuit’s thorough report released earlier this year, it found:
n 27 per cent of businesses without employees say they currently don’t employ anyone because the administrative burden puts them off.
n 26 per cent of bosses would be encouraged to hire someone if employer’s National Insurance payments were cut.
Whether or not the government gets its act together, a much more sustainable way – both for entrepreneurs and the public finances – to get access to seed capital is to turn to private equity.
City Meets Tech is an initiative to get Canada banking community to invest in technology start-ups, bridging the gap between Silicon Roundabout and Finsbury Square. Its next pitching event will be at Google Campus on 9 July. Visit www.citymeetstech.com to find out more.
Twitter: @Philip_Salter