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100 Days of Dave: Has the Tory Government Been Good for Entrepreneurs?

16/08/2015 21:47 BST | Updated 16/08/2016 10:59 BST

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To mark 100 days of the first Conservative government in nearly 20 years, HuffPost UK is running 100 Days of Dave, a special series of blog posts from grassroots campaigners to government ministers, single parents to first-year students, reflecting on what's worked and what hasn't, whilst looking for solutions to the problems we still face.

Fourteen weeks is a long time in politics, the difference between the possibility of an SNP-Labour coalition and the reality of a Conservative government. Back in May, it was suggested that the ideological distances between the two main parties were greater than at any time since 1992 - if not earlier. Today, with veteran left-winger Jeremy Corbyn on course for leadership victory, that gulf could be widening.

Yet there is one subject on which all parties are agreed: that entrepreneurs are good for Britain. They're good for job creation, they generate new wealth and, in many cases, they spark social change. Last year there were 5.2million micro and small businesses in the UK, employing over 12million people and with a combined turnover of £1.2trillion. While they may be split on the best way to foster entrepreneurship, politicians rightly view these business owners as national assets, there to be supported and motivated as much as possible.

Entrepreneurs themselves, meanwhile, now have high expectations from a Tory government. This is the party that has repeatedly referred to small businesses as the "backbone of the economy," as well as pledging to slash red tape, tackle late payments, fund more apprenticeships, and increase personal tax allowances and national insurance holidays.

It quickly looked like their hopes would be met. The post-election dust had barely settled before Business Secretary Sajid Javid announced an Enterprise Bill that would cut burdensome red tape for businesses by at least £10billion over the next five years, create a Small Business Conciliation Service to help resolve disputes, and crack down on late payments - which are set to cost British business £40billion in 2015.

But it was the Summer Budget that gave the Tories their best opportunity yet to validate claims that theirs is the party of "grafters and the roofers and the retailers and the plumbers". And Chancellor George Osborne delivered some good policies - like cutting the corporation tax rate; adding greater flexibility to the lauded Seed Enterprise Investment Scheme; and introducing a new levy on large employers to help fund the government's target of three million apprenticeships by 2020.

But the surprise announcement of a new National Living Wage (NLW) is bad policy. Academic studies have found little, if any, evidence of positive employment effects of minimum wages, and the OBR has estimated that the NLW will lead to 60,000 job losses and reduce GDP by 0.1% by the end of the decade. If the Chancellor wanted to help the low paid, he should have slashed Employers' National Insurance, 70% of which is paid for by the employees.

Yet while tax, employment legislation and regulatory reform are all vital for maintaining a flourishing entrepreneurial environment, the government is placing far too little emphasis on policies that affect our ability to nurture, attract and retain the best talent. The future wealth of our nation depends on a new generation of entrepreneurs coming up with ideas and turning them into companies that will provide wealth and employment. But we face two glaring problems.

First, most children still go through school without ever coming into contact with business or enterprise. Yet research shows that if you're exposed to business as a young person, you are more likely to view entrepreneurship as a serious career option later in life. A recent study, for example, revealed that roughly half of all self-employed people in the US were second-generation entrepreneurs. Entrepreneurship should be embedded into our education system. We need more schemes like the Fiver Challenge, and we need our schools to work more closely with the business community and charities, like Young Enterprise - which gives youngsters a small loan to get started with a new business.

Second, while research shows that immigrants start up businesses at a disproportionately higher rate than natives, Home Secretary Theresa May wants tougher rules for visas for overseas university students. So as our government plans to send non-EU students home after finishing their studies, other countries are stepping up to attract foreign entrepreneurs. With new visa regimes, countries like Canada and New Zealand are serious competitors for international entrepreneurial talent. Our recent report with the National Union of Students found that 42% of non-EU students at UK universities intend to set up their own businesses following graduation. But the government's attitude towards immigration and its tightening of post-study work visa routes means just 14% want to do so in the UK.

After "one hundred days of Dave," the government has already served up some good policies for entrepreneurs. But our position as one of the best countries to start and grow a business is not inevitable, and it is relative. Talent is increasingly mobile: if entrepreneurs can build a bigger, better business elsewhere, they probably will.

How do you think Britain has changed since 7 May? Join the @HuffPostUK conversation on Twitter with #100DaysOfDave