Venture capitalist joins Fox to call for deregulation and cuts to business tax


A small business investor has called on the government to provide companies with tax incentives to stimulate the economy.

Stone Venture Partners founder Stewart Baird said the government must change its attitude to business, as well as offering them the tools and flexibility they need.

Baird’s comments come as former defence secretary Liam Fox called for chancellor George Osborne to reduce taxes on business in next month’s Budget.

“Liam Fox has introduced the one ingredient that is necessary to stimulate the economy: Realpolitik,” said Baird. “Realpolitik may be at odds with the culture of today, but to stem the flow of rising unemployment and stagnant growth, you have to make sacrifices.

“Giving businesses the tools, flexibility and tax incentives they need to grow with confidence is imperative. To date there has been mere tinkering around the edges, nothing of note,” he said.

Baird believes tough decisions could no longer be avoided by the government.

He said: “We’ve got to the point where we can no longer dodge the tough decisions. In the latest set of minutes, the Bank of England talks of ‘the evolution of productivity’.

“In the current climate, productivity will only ever evolve if the mindset of government towards business evolves itself.”

The government is under pressure to get the economy moving in the right direction and the Budget is expected to contain new measures to help businesses.

Fox, writing in the Financial Times, said cuts to business tax should be the number one priority, ahead of the tactic of raising personal allowances to bring people out of tax altogether favoured by the Liberal Democrats.

He said it should be easier for businesses to hire and fire staff and a sweeping deregulation of the labour market should take place.

Fox said: “Although the coalition agreement may require the chancellor to raise personal tax allowances (which should be paid for with spending restraint not new taxes) he should use the proceeds of spending reductions to cut employers’ national insurance contributions across the board.

“If that is deemed impossible, he should consider targeting such tax cuts on the employment of 16 to 24-year-olds, making them more attractive to employers.”

Fox said it was currently too tough to hire and fire staff and political objections should be overridden.

He added: “It is intellectually unsustainable to believe that workplace rights should remain untouchable while output and employment are clearly cyclical.

“It is utterly unacceptable to condemn a generation of our young to unemployment by maintaining all the rights and privileges of those currently in work.”