An independent enterprise review commissioned by the Conservatives has proposed a national system based on TV show Dragons’ Den to boost entrepreneurism.
The review, which was conducted by the European School of Management, found that compliance costs were preventing business angels or “dragons” investing as syndicates in new businesses.
It proposes reducing the costs of compliance to improve financing for growing firms. It also recommends setting up a virtual marketplace for unlisted investment opportunities.
The review believes that the tax burden for small and medium enterprises is stifling entrepreneurism and calls for a simpler tax system with a lower main corporation tax rate. It says having a separate rate for SMEs contributes to the barriers to growth. It recommends more incentives for reinvestment into new business and calls for taper relief, which Chancellor Alistair Darling abolished in the 2007 pre-Budget report, to be reinstated.
Along with tax, the majority of new business owners cite the volume, complexity and rate of change of regulation as the biggest constraints to growth.
The review also finds that the education system is not helping young people develop an entrepreneurial attitude and basic business skills and that there is a lack of entrepreneurial role models.
It calls for the introduction of mentoring schemes for young entrepreneurs and more focus on business skills in schools, for example, encouraging students to set up mini businesses.
The report reveals that the percentage of businesses that achieve an annual turnover of over 1m five years after creation has fallen from 48 per cent in 1997 to 16 per cent in 2006.
Tory Shadow Chancellor George Osborne says: “These recommendations provide a blueprint for making Britain the enterprise capital of the world with simpler taxes, lower tax rates, less regulation and a generation of young people with the skills they need to start their own business.”