The Businessman Politician: 9 things I’d do if I were Prime Minister

14 min read

I were in charge of the UK economy, and I was tasked with growing it while helping small businesses, this would be my election manifesto…

In this blog, I’ll break down all the points I think would seriously help entrepreneurs and business owners, while growing the UK economy. It’s all pretty common sense stuff, but see what you think.

On Thursday 4 July, the UK population will vote for its next Prime Minister.

These are really tough times. We’ve got inflation starting to get under control - but I think we’re going to peak again. Shipping container costs have gone through the roof.

There’s still some economic uncertainty, with wars going on all around the world.

It’s probably the toughest it’s ever been to be an entrepreneur, since the beginning of the pandemic.

In fact, I recently put out an Instagram post asking my followers if they’re finding it tougher now than they did this time last year. A whopping 80% said “yes”.

Why is that?

You’ve got a government or status quo which is making it increasingly hard for businesses to thrive. In fact, they’re just about surviving.

How can we switch to thriving? What mechanisms could the government use, to help entrepreneurs soar to success?

Here’s the thing, governments are like businesses. They need to bring in taxes to pay for those potholes, education, police services, yada, yada, yada…

They need cash. How do they get it?

1. Keep borrowing money - and tax us more.

2. OR they could be more dynamic. That’s where the entrepreneur comes in.

The trouble is the government has so many people who need to agree - backbench MPs, a massive civil service that has incredible influence, local councils, the International Monetary Fund, and big businesses - which are pulling all these levers.

When you’re an entrepreneur, you can gamble a bit. But when you’re in government, the decision making process is so much more difficult.

However, I do think the government makes some silly decisions.

No, you can’t just reduce taxes and let everyone have fantasy economics. There needs to be some serious decision-making about which levers you pull to drive the economy.

I made a video recently about a sole-trader hairdresser who wants to grow their business, but they’re hit by massive turnover taxes which deter them from doing so. All the red tape and bureaucracy just stops people taking their businesses to the next level.

So, how would I change the system to take UK entrepreneurs from surviving to thriving?

My nine-point manifesto:

1. Reduce turnover taxes - tax profit instead

Tackling turnover taxes - that’s where I’d start.

I think, when people have made a profit, they’re very happy to pay in. What they don’t like doing is paying taxes before they’ve paid themselves.

Turnover taxes hugely disincentivise growth. They’ve risen in value over the last 20 years I’ve been in business.

For example, insurance premium tax - a turnover tax you pay to insure your business - didn’t even exist when I started out. You didn’t have green levy tax, which you pay on all your utility bills, either. You didn’t have VAT as high as 20% - it used to be 17.5%.

You didn’t have all these other turnover taxes which are eroding the revenue that a business gets to keep - to invest in itself and pay profits.

If you finally make some money, you have to contend with the highest ever corporation tax we’ve ever had.

I’m okay with the corporation tax, but I don’t want all these turnover taxes on top. It’s just more, more, more.

We’ve got to stop that.

2. Crack down on red tape - especially planning regulations

Planning is just taking too long. That really costs our economy, and YOU.

If Joe Public knew just how inefficient and costly this has become, in terms of how it loads on the cost of house prices, they’d think the local loan shark was a fairer chap!

I’m not just talking about building on green space - I’m talking about the simple stuff, like “change of use” on buildings which aren’t being used.

When I started out in business, I had a big commercial warehouse which I converted into a family entertainment centre. It went from “storage and distribution” to “leisure”, so I had to go to the local council and get a “change of use”. That was pretty simple stuff, and only took between three and six months.

Yours truly at Partyman World in Stevenage several years ago.

If I wanted to do that now, it would take up to 2 years! It just takes too long to get stuff over the line.

What does that cost the government? That costs them in bloody turnover taxes and employee taxes, because I’m not trading as it’s taking too long to get things over the line.

There are so many examples where red tape is preventing us from growing our economy. It wouldn’t cost the government anything, but they need to have a clear approach to this stuff.

Every year, we’re layering on more bureaucracy which just stops business happening.

We need to get it sorted out, gang!

3. Focus more on SMEs (£250k to £10m turnover businesses)

Most of the people who watch and read my stuff run SMEs.

I think there’s a huge opportunity to find the next JCB, Cadbury, or Dyson. They are here in the UK economy, but we just don’t focus on them enough.

What the UK Government does very well is focus on the big banks and the FTSE 100 or 500 companies. They get their time with government, but they used to be an SME which grew over time.

Yes, we want the corporate businesses as a central part of our economy. But let’s also focus on the SME that’s ambitious and wants to grow. It’s very hard for them to get banking, funding and all of that stuff that could get them to the next level.

I would create the British SME Business Bank.

This would be an incentive for banks to lend into those sectors, rather than just backing the big corporations. Government would back it, giving guarantees and securities, and stand in for banks. But the banks would do all the legwork to lend money to businesses.

We’ve done stuff like this before. In fact, bounce-back loans and the Coronavirus Business Interruption Loan Scheme (CBILS) were a good example of how easily, quickly, and effectively we can do this.

Do you know what? Most CBILS loans have not been knocked. Most people are diligently paying them back - but yes, there are a few rogues out there.

What happened was banks got cash to businesses very quickly so they could grow.

Currently, these SMEs are going to the challenger banks, peer to peer lending with horrific rates of interest - when they’re probably profitable enough to go to a high street bank and get much cheaper financing.

With cheaper financing, they can use their cash to employ more people and grow their businesses.

That is a huge opportunity we’ve got.

We’ve got businesses going over £10 million a year which want venture capital and private equity money from the British Business Bank, but what about the SMEs which are getting £250k-£10m per year?

I think those offer the greatest opportunity to grow the UK economy.

4. More places to trade - we need more 3,000 to 5,000 sq ft units

Lots of SME businesses between the £250k-£10m mark need a 3,000 to 5,000 sq ft unit to operate from, especially if they’re making stuff. You’d be shocked at how hard it is to get those buildings.

They’re like rocking horse poop, ladies and gentlemen - they just don’t exist!

I’m a landlord. I own lots of them. As soon as a tenant moves out, we’ve got a list of people who want to move in. I look to buy more and more all the time, but they’re just not available.

We’ve got to come up with an incentive to get commercial property developers or councils to build them - because they create jobs and help us make things.

The UK economy is very service-based. Decades ago, we were very good at manufacturing stuff.

We have lots of people who are engineering-minded and want to make stuff, but they just find it difficult to find affordable places to trade from.

We could incentivise that through business rates, too.

If you’re an engineering firm making stuff to support other economies, you should be incentivise

Local authorities owning commercial properties allows people to trade in buildings that are really affordable - instead of Monopoly landlords charging really high rents, purely from a supply and demand point of view.

We need to find a way of growing a portfolio of properties in the UK that are really good - for people who want to do storage, distribution and make stuff - that are up to 10,000 sq ft.

There are plenty of big buildings for distribution that are hugely expensive, for the likes of Amazon, but I want buildings that SMEs can trade from which are affordable.

That’s one of the ways I’d grow the UK economy.

5. Employment Tax Breaks

If you want to go out and employ people, Employers’ National Insurance costs are so expensive that they deter SMEs from taking people on.

There are only 7,500 companies in the UK that employ more than 250 people. That’s madness.

Of those, some are people like me - with 1,200 staff and multiple companies which employ more than 250 people. That means only a few thousand people are controlling the workforce.

It’s not because people don’t want to give it a go. It’s down to the cost of employment.

I don’t mean people’s salaries - I mean the taxes you pay the government to employ someone.

You’re doing a really good thing for the government, giving people jobs, only to be taxed through Employers’ NI and all the gumph that goes with it.

We need to make it as pro-employment as possible so business owner takes the risk of switching from being a solo-preneur or a one-man-band into employing people.

How can we do that? Let’s incentivise employment so we’ve got more SMEs that take the risk to employ people to grow into medium-sized businesses.

Over time, we’ll have big businesses. As a result, we’ll grow the UK economy.

6. Widen the country’s skillset and become a diverse economy

We’re brilliant at financial and legal services in the UK. But let’s start making more stuff, so we’ve got a diverse economy.

A lot of countries have done this.

We should look at parts of our country - such as free ports, where you can get stuff and in and out more cost effectively. Let’s go further than that.

Let’s incentivise manufacturing so we’ve got a broader economy. That means if we do have a financial services problem in the future, like another credit crunch, we can lean on our engineering capabilities.

We want to boost science and medicine to create a cocktail of industries, so we’re a diverse economy.

Governments and politicians talk about this, but they must take action.

We’re doing everything we can to ensure we’ve got strong financial services, but a broader economic skillset would significantly benefit all sectors.

7. Different rates of VAT per sector

VAT is the killer of entrepreneurship.

This turnover tax is the worst of the worst.

In some cases, it’s so deeply unfair that it stops people even growing the turnover of their businesses. That’s especially true for service-based industries.

If I were Chancellor of the Exchequer, I would have different rates of VAT.

For services - e.g. if you’re going out to restaurants, getting a haircut, or paying for a gardener - I’d have a lower rate of VAT.

Meanwhile, I’d have a higher rate of VAT for when you buy products. Say you buy a swanky new TV, you’d pay a higher rate of VAT.

But in a restaurant which brings stuff in that’s zero-rated at a complete cost to them, there’s nothing they can offset.

I own several hospitality and leisure businesses, including the Rossi Ice Cream parlour in Southend, Essex.

For example: if you’re a builder’s merchant who buys a pallet of bricks for £1000+VAT and you sell it for £1,200+VAT, you’re claiming some VAT back and charging it - and there’s some offsetting.

However, if you’re a restaurant buying in loads of zero-rated foods (such as vegetables) and putting it on a plate, then charging it out at 20%, that’s just coming off the bill. The thing is, you can’t just charge more and more to your customers - especially during these tough economic times - so you erode your margin just to stay in business.

The government knows this. During the pandemic, the government reduced VAT for hospitality and leisure businesses, because they knew they’d just about survived… forever.

They had to reduce VAT to ensure hospitality could continue, because it’s a sector that is really good at employing young people and driving communities in our areas.

Other countries know this. In the Republic of Ireland, they have a lower rate of VAT for hospitality and leisure businesses and a higher rate for products. The same applies in France and Spain.

Why we don’t do that in the UK is absolutely beyond me.

If you’re a service-based business, I think you should have lower VAT. If you’re buying in products, you should pay higher VAT. That’s purely from the offsetting point of view.

I think you’ll find those sole-trading hairdressers, for example, start taking more people on and expanding to commercial premises.

You’ll see gardeners, who do everything they can to keep their turnover just below the threshold so they don’t end up giving all their profit to the government, say: “Do you know what, this is a bit fairer now. Let’s go for it and grow our business.”

8. Create a better system for mentorship

When a lot of business owners are struggling, their first port of call is usually their accountant.

In my view, most accountants are not entrepreneurially-thinking, they’re numbers-thinking. That makes them naturally risk-averse.

But if you’re a growing entrepreneur, you want to take some risks where you see opportunity.

So where should you go?

Some of my best mentos and advisors over the years have been my bank managers. But banks really only put good managers in for businesses like mine, who do over £5 million in revenue.

Going back 10-20 years ago, the local bank manager would know loads about SMEs, they’d have lots of clients and they’d get really good training from the bank. They would be like an advisor to the business. Yes, they’d help finance the business, but they’d also say: “Let’s see your monthly management accounts.”

They’d put rules and restrictions on when you borrowed money and would connect you with other businesses in the area. They offered a really good community service.

Banks, on the whole, have got rid of this brilliant old-fashioned bank manager. I think we should bring them back.

Government and councils need to work more closely with high street banks, to help foster entrepreneurship in the UK.

The thing is, banks look at it and go: “How can we afford this for an SME business? We see how we can for a business doing £5 million plus of revenue, but how can we afford it for the small business?”

I think the government should team up with high street banks and bring back the bank managers. They should incentivise the banks by taking the security on loans, or offering them a tax break. Then, you’d have loads of business hubs opening in communities, to help coach business owners to become more successful. Perhaps they’d lead seminars in communities, to help grow the economy.

This was something we had 20 years ago, but we also have community banks around the world that do this now. I really think it would be really smart for us to do that here.

But for this to work, we’d need business banking and the UK government to work in tandem so this becomes a long-term thing. You won’t get immediate results in three to six months. You’ve got to think in ten-year chunks.

That’s what entrepreneurs are really good at. They can think, “In ten years’ time, my business is going to look like this.”

Meanwhile, big businesses and government are so short-term thinking.

How can we get government to think longer-term?

When you take a mortgage out on your house, you think: “When I retire, my house will all be paid off and I’ll have a nice little pension pot.”

Entrepreneurs think like that too: “We’ll invest and, in three to five years, get a return…”

Big businesses and governments think in 90 to 100-day chunks. That isn’t necessarily long enough to get good results.

I think local banks and government should create a community-based mentorship scheme.

Business owners trust their banks. Managers should be logged in with government and accountants, to better understand their customers and help grow the economy.

9. Local government supporting local business

Councils need a real incentive to grow the businesses where they are.

Here’s the problem. Local government goes through various elections every few years, so they’re always changing, whereas businesses are usually much more constant.

Therefore, we need to come up with a way for business and local government to have a more stable and cooperative approach.

Councils give big contracts out to massive FTSE 100 companies for their FM, legal services, or whatever it is.

How can we incentivise them to use more local services - to give them a chance to grow and eventually become big businesses?

Look at the UK economy as a whole. How did we get Dyson, JCB, Cadbury, or all our other well-known brands? They were all “starters” before they were “masters”.

I want to help those who taken the first step into entrepreneurship. They’ve taken some risks, employed people and want to go to the next level, but they find it very difficult to get financial advice and support.

We do have the institutions in place to help people but we just aren’t using them effectively enough to grow our businesses, companies, and our country.

The sad thing is we did have that stuff many years ago. We need to bring some of the old school back to help grow our economy.

Conclusion

Throughout this “manifesto”, I don’t think I’ve said anything too sexy.

I haven’t slashed taxes. Yes, I want us to be as competitive as possible as a country, but I think I’ve come up with some good common-sense things to go alongside that stuff.

Take planning reform, for example. Let’s get that done, and get businesses open to bring in more tax receipts to grow our economy.

We’ve got a real opportunity in this country for ours to become the biggest economy in Europe. I wholeheartedly believe that.

We need to be making more stuff and offering the right tax incentives to guarantee growth. Otherwise, people will just leave.

I know people who are on good salaries - not millionaires, but they’re comfortable - who are leaving the UK for Portugal, the UAE and elsewhere, just because they’re fed up of paying “too much tax”.

We’ve got to strike a balance to look after those at the bottom of the pyramid. Meanwhile, those at the top need to be incentivised to stay and contribute.

At the moment, I think the system is unfair and unreasonable for those who are earning “okay”. It worries me, because I’m seeing them leave every single week.

When you lose someone who’s on between £100,000 to £150,000, who’s paying so much in and driving our economy, that makes me really sad. They feel they’re getting a bad deal.

We’ve got to work on that. It needs serious thought and attention, or they’ll just leave.

If that happens over the next 10 or 20 years, we won’t be the sixth or even seventh biggest economy in the world. We’ll find ourselves in tenth, eleventh or twelfth place.

However, we’ve got a great opportunity to become the biggest economy in Europe - if we offer the right tax incentives, think entrepreneurially, and open our arms to say: “We want small businesses, wealth creation, and to incentivise hard work”.

Those are my thoughts, anyway. Let me know what you would do, in the comments. I can’t wait to read them!

WATCH my full video below, for what I’d do to boost business if I were in government: