New Home Office rules will stop the growth of small businesses
Within a few days of David Cameron’s team arriving at No 10 in May 2010, we got a shock. Not about the food in the Downing Street café, although that was pretty bad. No, we were taken aback by how cosy the relationship was between civil servants and big business.
When we were in opposition, we’d worked hard to make sure we engaged with start-ups as well as multi-national corporations, but now we were in government it was clear that civil servants working on business policy typically only ever talked to the biggest companies. A great example was Cameron’s first major foreign trip, when we wanted to take a jumbo jet full of British business leaders to India.
Foreign Office officials pulled together the draft list of delegates, which were all huge, established companies such as Vodafone, British Gas and British Telecom. When we requested that fast-growing enterprises were added to the list, civil servants told us they’d be inappropriate because “they weren’t doing any business in India”. Fortunately the Prime Minister intervened, pointing out that the point of the trip was to open doors, not just help businesses already operating in India, and we got our way.
I lost count of the times civil servants were proposing to do something that would be bad for small companies, and when I checked who they’d consulted, I’d discover it was the likes of Tesco and Microsoft — in other words, wealthy corporations with nothing in common with small businesses.
I was reminded of this last week when the Home Secretary Amber Rudd was setting out her heinously bureaucratic immigration policies. When asked whether she was going to talk to businesses, she replied that she’d be in touch with the Confederation of British Industry (CBI), not with entrepreneurs or small business owners.
It’s not surprising that ministers and civil servants like to talk to big business. Corporations have public affairs teams stuffed with former officials and advisers, which means they’re easy to contact and happy to respond to the latest laborious government consultation. Start-ups, on the other hand, are harder to track down, and much too busy to bother hiring lobbyists.
But it’s vital that these fast-growing enterprises are listened to, because they create the majority of new jobs in the UK. In fact, just six per cent of high-growth firms generate 60 per cent of all new jobs, which explains why Tech City in east London has seen so much job creation over the past five years.
“It’s vital fast-growing enterprises are listened to, because they create the majority of new jobs in the UK. In fact, just six per cent of high-growth firms generate 60 per cent of all new jobs, which explains why Tech City in east London has seen so much job creation over the past five years.”
Right now the immigration system is bureaucratic, sclerotic and expensive — all of which hurts a fast-growing small company far more than a big business. It can take six months and cost £25,000 in legal fees to navigate the visa system, which is disproportionately painful if you’re a start-up than if you’re a corporation with 10,000 employees.
If the Home Secretary bothered talking to entrepreneurs, she’d hear this. Instead, she’s planning to smother small businesses with new regulations that will make it harder to grow and will inevitably mean fewer British jobs for British workers.
Ms Rudd should visit Tech City sometime — she’d see how many brilliant London companies were founded by foreign entrepreneurs, and how talented global workers help drive job creation in our city. I’d be happy to show her around but I can’t pretend she’ll get a very warm welcome.
By Rohan Silva
Originally published at www.standard.co.uk on October 10, 2016.
Rohan Silva is the founder of Second Home, a creative workspace and cultural venue, bringing together diverse industries, disciplines and social businesses. Find out more about joining us here: secondhome.io