The Startups office spent most of yesterday trying to clear enough space in our inboxes for all the reaction to Darling’s second Budget. But while the lobby groups, accountants and corporates had their say, it’s the entrepreneurs’ opinions that count round this neck of the woods. So we gave some of the UK’s best and brightest a soapbox, then stood back and watched them let rip:
On the support, or lack of, for small businesses:
Warren Bennett – A Suit That Fits: “We believe that continued government and investment and support for Britain’s SMEs is crucial to recovering from the recession. Small companies like ours contribute significantly to the UK economy.
Michael Stephanblome – AdJug: “I am disappointed that the budget did not contain more explicit and specific help for small and medium-sized businesses – a major source for job creation in a difficult economy. It seems that again lobby-strong industries like the construction and the car industry with big corporates were favoured over smaller, more innovative businesses.”
Matt McNeill – eTickets.to and Sign-up.to: “Considering that small businesses will be the ones to pull the country out of recession, the budget does pitifully little to support them.”
On loss making firms claiming back taxed profits:
Simon Calver – Lovefilm: “It is good to see the reality of the full recession is at last recognised but the budget is a mixed bag. Good news for struggling businesses but bad news for successful entrepreneurs. There are a number of good capital investment incentives and deferral of tax initiatives that will help the ease the pain in this tough time but if you can give dividends or take more reward you should plan carefully and quickly as tax rates are increasing significantly.”
On the banks’ failure to lend:
Mitesh Soma – Chemist Direct: “Ultimately, we entrepreneurs are going to be the ones that get us out of this mess, but there is no help for us from the chancellor and small businesses have largely been ignored. Until the banks start to lend again how can any new businesses expect to get off the ground? The responsibility lies with the government and its failure to offer a Budget which gives the banks a glimmer of hope which will kick start lending again.”
On the £750m tech fund and £1bn for green industries:
Doug Richard, serial entrepreneur and former Dragon: “It’s hogwash. It is simply a continuation of a series of failed policies based on flawed philosophical principles, the key one being that they can choose which industries will be winners. No one has ever been able to do that, a government certainly cannot.”
Matt McNeill – eTickets.to and Sign-up.to: “The investment fund for innovative tech and science firms is a good idea but too small to be really meaningful.”
Kresse Wesling – Fire-hose: “I am excited about the environmental budget but seriously worried about how it will be managed – this is a government that doesn’t keep receipts for its expenses! I think we need a body of senior environmental leaders to control planning, oversight, and have open book access to the accounts here.”
On the 50% income tax rate on those earning £150k+:
Matt McNeill – eTickets.to and Sign-up.to: “The biggest danger to businesses is the short-sighted raising of the top tier of income tax to 50%. What Labour doesn't seem to realise is that it's not just bankers and lawyers that this will affect - it's the successful entrepreneurs, the one's providing the jobs for millions of people by taking the risk of starting a business. Now they're being told that should they make a real success of things they'll have to give half of what they earn back. What an incentive. These are the people who are most able, and likely, to leave for more hospitable business climes - taking jobs with them. Can anyone say 'brain drain?' I think come April next year you'll see a lot of business talent at the departure gate of Heathrow. That'll really help our economic recovery.”
Oliver Bishop – Steak: “Increasing the top rate of income tax to 50% and scrapping personal allowances, is a big disincentive to management. It is proven that the higher the tax rate, the smaller the amount paid to the Exchequer. Why penalise the entrepreneurs who will find a way out of the recession?”
James Hibbert – Dress2kill: “This is just further punishment to potential entrepreneurs who will have toiled and worked under immense pressure only to be punished when they finally succeed. The government continue to do nothing to encourage enterprise in this country and now is surely the perfect time for them to be getting behind any would be entrepreneurs.”
Doug Richard, serial entrepreneur and former Dragon: “It will not create the amount of revenue which he hopes. He hasn’t taken into account that people will plan accordingly when the rate moves up and there are many variables involved. Avoiding tax is a legal exercise.”
Matthew Riley – Daisy Communications: “Many of those in this top bracket are entrepreneurs who will have risked their own capital and property to start new companies and create wealth in the UK. There is no aid or reimbursement for the risks that start-ups take and this change in tax will be a further deterrent for anyone entrepreneurial looking to enter business. In addition entrepreneurial leaders are now going to be under pressure to make up the wages for their senior executives who are earning above the £150,000 threshold. All in all, not a great day for business.”
Charlie Mullins – Pimlico Plumbers: “This is an appalling piece of logic, just when the government should be encouraging the people who have the ideas, drive and ability to pull us out of this dreadful recession they are trying to squeeze more tax out of them. They should be working with incentives not punishing top earners!”
On the current government:
Doug Richard, serial entrepreneur and former Dragon: “We have a huge amount of money being spent on an hourly basis most of which is deeply wasteful. They had a once in a lifetime opportunity to rethink how we deliver necessary public services and they have completely failed to take advantage of the moment.”
David Soskin – Cheapflights and Howzat Media: “In many ways, this budget is a complete irrelevance. It is highly unlikely that these people will be in power a year from now. Gordon Brown is squarely to blame for the depth of the crisis and the British people know it. Darling is clearly completely out of his depth. Any business employing a Finance Director with such a poor grip on the numbers as Mr Darling has displayed whilst he has been in office would have fired him months ago.”
Tom Savage – Bright Green: “I moved to San Francisco in February - a wise decision, it seems. Despite being many times larger than the UK's, the US government continues moved more nimbly, purposefully and confidently in reaction to the financial crisis. There is a sense of optimism, despite the gloom. Obama has promised to transform the US economy by pumping money into energy, infrastructure and environmental issues. Here in the US, people believe that will happen. The UK government sounds like it is desperately clutching at straws, claiming that it will transform the economy into a high-tech, eco-economy? Does anyone believe that could happen? I'd love to, but I don't.”
On Labour’s stance on enterprise:
Matthew Riley – Daisy Communications: “I think this year’s Budget has totally discouraged enterprise. If entrepreneurs are vital to the recovery of our country’s economy, which the Chancellor has said publicly very recently, then now was the time he should have stood up and showed substantial encouragement and vital support. It would have been nice to see the Chancellor and his team take on more of an entrepreneurial approach. Mr Darling has spoken at length on how vital entrepreneurs are to helping the economic recovery and he should therefore be providing incentives for them to be more successful in the future.”
Mark Turrell – Imaginatik: “The 2009 Budget does not support entrepreneurs. We are supposed to be driving future economic growth but there is little support shown for entrepreneurial culture which is dependent to driving the UK out of the recession.”
Dan McGuire – Broadbean: “Not only is Alistair Darling the least charismatic person in Britain, he’s also totally delusional. Justifying the staggering increase in debt with claims that the economy will grow by 3.5% in 2011 is truly pushing the boundaries of reality. Is there honestly a single person in the country who believes that is possible? And what of Gordon Brown’s sniggering while he and Darling were rightly savaged by Cameron? He should show some respect and spare a thought for all the people that have lost their jobs and businesses due to Labour’s total mismanagement of the economy.
Doug Richard, serial entrepreneur and former Dragon: “Overall, we’re sending out a message out that we’re not interested in encouraging the creation of new businesses. We’re essentially putting a dampener on the likelihood of a recovery from the recession.”