Roger Trapp: Brown is not quite enterprising enough

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The Independent Online

Gordon Brown has long had a thing about promoting enterprise. Over the years, the notion has assumed an importance on a par with his much-vaunted prudence.

Gordon Brown has long had a thing about promoting enterprise. Over the years, the notion has assumed an importance on a par with his much-vaunted prudence. And in last week's Budget, while prudence experienced a sharp decline in popularity, there it was again.

Apparently spurred by his recent visit to China, the Chancellor repeated the familiar argument that Britain could not hope to compete as a low-wage, low-skill economy, but must establish itself as a leader "in skills, science and the knowledge economy".

Few would disagree. The problem is what to do about it, especially when it cannot be expected that China and India will be content to compete on price alone for very long.

Mr Brown's response, of course, was another series of measures aimed at boosting enterprise and the UK's creative industries as well as proposals for helping manufacturing. Indeed, he is proposing linking the successful creative industries with Britain's more traditional businesses by responding to an argument that the Government-funded Design Council has been making for years. This is that companies who invest heavily in design outperform the stock market overall.

Like many of those who have not hitherto enjoyed this advantage, he is apparently unsure how this works and so has adopted another favourite policy - commissioning a review by a well-known business figure. So George Cox, chair of the Design Council, is supposed to examine how the UK's success in such areas as software and media can be transferred into others.

Meanwhile, Mr Brown claims to be setting about "removing barriers to enterprise". Certainly, the reduction in the number of agencies carrying out inspections and checking on standards and the move towards a "risk-based" approach to regulation will go some way to reducing concerns in this area.

But, while the planned move towards a single approach to the taxpayer from the Inland Revenue and Customs and Excise is to be welcomed, there is still a feeling that many people are put off either setting up in business or growing once they have started by the perceived complexities involved with income tax, National Insurance and VAT, especially as they relate to staff. And there is anecdotal evidence that there is apparently less and less leeway given to businesses late with payments due to cash-flow problems.

As in the past, the Chancellor made some right noises about encouraging enterprise - expanding entrepreneurial scholarships as part of an effort to ensure that all school children received some tuition in enterprise. He also enhanced research and development tax credits for mid-sized companies, guaranteed a share of public sector contracts for small technology companies and offered funding incentives for universities to open up their research facilities.

But many measures amount to little more than tinkering and are of doubtful value to growing businesses - and so of limited cost to the Exchequer. As PricewaterhouseCoopers pointed out: "Gordon Brown has introduced some helpful policies to encourage enterprise, but his penchant for complexity and the uncertain tax environment this creates could tarnish his good work. If the UK wants to encourage enterprise and innovation, the Chancellor must make sure that the aspirations he has expressed in his Budget are quickly translated into reality for UK business."

Perhaps he could take into account the views of another body he (with Patricia Hewitt) set up to promote enterprise. The Women's Enterprise Panel said the fact that only 15 per cent of businesses are led by women suggests there is "a huge pool of female talent that could be setting up businesses and generating wealth". It added that if the UK had the same levels of female entrepreneurship as in the US there would be about three-quarters of a million additional businesses.

Among the recommendations for bringing this about were basing responsibility for it in the regions rather than expecting it to be promoted from London. "We need to ensure all women across the country have access to high-quality, female-friendly business support to help them from having a business idea through to making that a reality."

The seeds are there for that to happen, not just for businesses run by women but for all growing enterprises. Mr Brown announced in the Budget that his recently announced incentive for commercial property purchases in enterprise areas would be swapped for a new initiative - focusing the promotion of business-led regeneration in such areas on the areas themselves. The Regional Development Agencies have the chance to really make a difference, not just to their own regions, but to the country as a whole by championing growing businesses.