The Government must get out of the way to let entrepreneurship flourish

June 08, 2011 4:34 PM

On Monday Duncan Bannatyne wrote about the life of a modern entrepreneur in the Financial Times. Among other things he discussed the overwhelming amounts of regulation and bureaucracy that blight today’s businesses, and the failure of banks to provide loans to those looking to start new firms.

The myriad of poorly thought out, badly written and obstructive regulations and laws that govern those who try to start - and grow - a business is a huge burden and can hold otherwise sound businesses back. The Business Secretary has made it his job to cut regulation but action needs to follow the rhetoric.

In addition to less regulation, lower taxes are needed to keep those businesses that do succeed in the country. If we are to return to the nation of entrepreneurs we once were, the Government needs to encourage entrepreneurial spirit by doing less, making the environment less daunting. The lack of capital to start up a business in the current economic climate is a real concern but the reluctance of some banks to provide finance for viable businesses is only part of the problem. Governments must be wary of directing the banks to finance more loans while also demanding banks build up their reserves to guard against another crisis.

The Government has for too long patronised entrepreneurs with Regional Development Agencies and by attempting to pick winners. Further government ‘assistance’ is not what the business community needs. The only way the government can truly help is to cut taxes and regulation. A good example is the North East  - it's now heavily reliant on taxpayers' money, with 64 per cent of GDP in the region made up by public spending. But it hasn't always been like this; it was previously an industrial powerhouse, with the likes of George Stephenson creating huge industries at a time of low tax, less regulation and a much smaller state. The standard of living of poorer people at the time was dragged up with high wages, and people flocked from all over to work there. The place was a hive of innovation and entrepreneurship.

Bannatyne makes some good points in his piece, although his call for greater government assistance for entrepreneurs should mean getting out of their way so they can create jobs and wealth. Although he summed up the folly of grant-giving best on Dragon's Den, as this clip shows.

On Monday Duncan Bannatyne wrote about the life of a modern entrepreneur in the Financial Times. Among other things he discussed the overwhelming amounts of regulation and bureaucracy that blight today’s businesses, and the failure of banks to provide loans to those looking to start new firms.

The myriad of poorly thought out, badly written and obstructive regulations and laws that govern those who try to start - and grow - a business is a huge burden and can hold otherwise sound businesses back. The Business Secretary has made it his job to cut regulation but action needs to follow the rhetoric.

In addition to less regulation, lower taxes are needed to keep those businesses that do succeed in the country. If we are to return to the nation of entrepreneurs we once were, the Government needs to encourage entrepreneurial spirit by doing less, making the environment less daunting. The lack of capital to start up a business in the current economic climate is a real concern but the reluctance of some banks to provide finance for viable businesses is only part of the problem. Governments must be wary of directing the banks to finance more loans while also demanding banks build up their reserves to guard against another crisis.

The Government has for too long patronised entrepreneurs with Regional Development Agencies and by attempting to pick winners. Further government ‘assistance’ is not what the business community needs. The only way the government can truly help is to cut taxes and regulation. A good example is the North East  - it's now heavily reliant on taxpayers' money, with 64 per cent of GDP in the region made up by public spending. But it hasn't always been like this; it was previously an industrial powerhouse, with the likes of George Stephenson creating huge industries at a time of low tax, less regulation and a much smaller state. The standard of living of poorer people at the time was dragged up with high wages, and people flocked from all over to work there. The place was a hive of innovation and entrepreneurship.

Bannatyne makes some good points in his piece, although his call for greater government assistance for entrepreneurs should mean getting out of their way so they can create jobs and wealth. Although he summed up the folly of grant-giving best on Dragon's Den, as this clip shows.

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