Lifting restrictions, lifting economic shackles and rebooting growth
Whether you are running a fledgling startup from a home office or heading up an international company employing tens of thousands of employees across the world, the challenge over the past 16 months has been the same. Those business owners who successfully navigated their business through the COVID-19 pandemic should take pride in coming through such an uncertain period in one piece.
Although we are a long way from being free of this virus, last week's relaxation of many of the restrictions will rightly be seen as a significant milestone for businesses and an opportunity to look forward and plan for the future.
Everywhere you look, there are reasons to be positive. Last year 835,494 new businesses were registered in the UK alone. That’s more than 2,200 every single day. It is also a 41% increase on 2019, proving that far from wiping out Britain's entrepreneurial spirit, the pandemic has actually turbocharged it.
Investment is up massively too. Equity investment into smaller UK businesses grew by 9% last year, despite the combined headwinds of COVID-19 and the UK’s departure from the European Union. The total of £8.8bn is the highest recorded since the British Business Bank started tracking the data ten years ago. Record growth seen in 2020 appears to have carried over into the first quarter of 2021, with £4.5bn worth of equity investment going into UK firms in those three months alone.
At Harper James Solicitors we have witnessed this entrepreneurial surge first-hand during a challenging year and a half, where we too have grown and prospered. As the law firm for entrepreneurs, we work with close to 2,000 ambitious companies of various sizes, and help support them at each stage in their lifecycle. Working alongside our expert legal team, many founders have turned the challenges of the past 16 months on their head and pivoted in a way that has enabled them to expand, secure investment and be highly optimistic about the future.
Whether it’s quickly switching supply chains, moving to home-working or launching a new product or service which is tailor-made for a tech-led market, entrepreneurs in all parts of the country have demonstrated remarkable innovation during the toughest of times. It has been inspiring to witness the resurgent and indefatigable entrepreneurial spirit of UK businesses. But now we need to build on it.
There are so many things which can help businesses like the ones we support at Harper James Solicitors to grow even further. An innovator’s rate of Capital Gains Tax (CGT) would be a positive first step. At present we have a lower rate of CGT for entrepreneurs, but it doesn’t really reward the best innovators, like the ones behind big biotech or fintech launches. Slashing CGT even further for forward-thinking entrepreneurs would help fuel even more innovation and drive our economic recovery.
Continued investment in schemes like Kickstart will also help businesses looking to grow in the future. Expanding the scheme as graduates leave university will help transform the jobs market and provide opportunities today for the innovators of tomorrow.
A fresh commitment to the government’s levelling up agenda matters too. At Harper James Solicitors, we support businesses right across the UK. If the pandemic has taught us anything, it is that you really don’t need a showy city-centre office to thrive. With the right support, you can work from anywhere and succeed. Ministers need to ensure go-getters based in towns and villages have the same opportunities to thrive as those heading to work each day on the tube, tram or metro.
Finally, we need to see government policies that match the optimism many businesses now feel. A recent report by Deloitte found businesses are gearing up for a boom in hiring and investment as economic activity returns to normal. Companies are looking to take advantage of record low interest rates and tax incentives to unleash investment to help meet rising demand.
Businesses are clearly drawing confidence from the strength of the economic recovery since some restrictions were lifted in April. But this confidence will evaporate if it isn’t matched by decisive and ambitious political leadership. This would remove the uncertainty which so many entrepreneurs I speak to say has been the hardest thing to deal with in the past 18 months.
Today should be more than about lifting restrictions: it should also be about lifting the economic shackles and radically rebooting growth. Forward-thinking, ambitious businesses helped drag our economy through the toughest period for generations. Now, if we let them, they will be the ones to ensure brighter days lay ahead.