Spirit of enterprise

18 Nov 05
ROBERT SHRIMSLEY | It is Enterprise Week. Don’t tell me your heart didn’t beat just a little faster on Monday morning knowing that fact.

It is Enterprise Week. Don’t tell me your heart didn’t beat just a little faster on Monday morning knowing that fact.

Around the country there were fairs and master-classes, conferences and competitions to mark the occasion. Funded by a grant from the Department of Trade and Industry, Britain’s business organisations have pulled together a week of activities to persuade the young to ‘be enterprising’.

Lest it be thought that this was not enough to show the government was doing what it could to promote enterprise, Chancellor Gordon Brown foreshadowed a number of initiatives to send Britain’s most promising entrepreneurs to see how things are done in the US.

One has to question the notion that government can just coax people into a life of business. One also has to wonder whether it is not a bit rich for Brown to attempt to cast himself as the founder of British entrepreneurship, as if the spirit of enterprise did not exist before 1997.

One might further linger over the various budgetary and regulatory measures that have made life harder for business in Britain (while at the same time tipping one’s hat to those that have helped, such as simplification of VAT compliance, R&D tax credits). But leaving aside the issue of whether Enterprise Week will make a crumb of difference, it is all perfectly worthwhile and harmless.

While all this was going on this week, over at the Department of Trade and Industry staff were facing up to the news that Sir Brian Bender, the new permanent secretary, had decided that what the ministry really needed now was a review of what it does to see if it could do it better.

This might be considered as demonstrating an admirable continuity in government policy. For, along with barrelling secretaries of state in and out at an average of one every 18 months, the DTI has become synonymous with introspective reviews. Indeed, one might go so far as to say that if there is one thing the DTI has got really good at over the years, it is reviewing what it does.

Since the days of Lord Young and Sir Nicholas Ridley, it has been routinely asking itself what it is for. In the last Parliament alone, Patricia Hewitt announced a review in 2001 and published a strategy in 2003 and a separate five-year plan a year later.

A cynic would suggest that any organisation that so regularly has to ask what it does and how it does it, probably doesn’t do anything much. There are many indeed who would call for the DTI’s abolition. One can make a case either way but most of the department’s functions are going to have to be done by someone, so a further rearranging of portfolios seems neither here nor there.

The DTI’s biggest role — aside from managing the science budget, which now accounts for around half the departmental budget — is playing umpire to the competing interests of unions and employers over workers’ rights. Ministers argue that keeping this in the DTI avoids departmental clashes between ministers. But it also prevents the ministry from being an all-out cheerleader for business.

It has long since lost its deregulation role to the Cabinet Office so its self-image as a department to drive forward the productivity agenda is pretty questionable. Trade policy is a European Union competence, while export and inward investment promotion is shared with the Foreign Office. If the DTI is to have a long-term role, it cannot be as a government equivalent of a lottery fund for business grants but as an anti-regulatory, export-driving department of commerce.

As an outpost of the Treasury, it has shuffled and rationalised the bewildering array of business grants and funds and poured cash into science and research. Yet the evidence of achievement is unclear. The Global Entrepreneurship Monitor showed that in 2000, 6.9% of Britons surveyed were involved in a business start-up. In 2003, that had fallen to 6.3%. Brown’s goal of matching the US’s 11.3% seems as distant as ever, while business conditions have been as benign as at any time.

The correct approach for a government and a department wishing to bolster the spirit of enterprise is to focus on the big picture and stop mucking around with scholarship funds, enterprise weeks, internal reviews and all the other small beer issues.

The laudable aim of building an enterprise society begins and ends with managing the economy well.

The government might be able to destroy the spirit of enterprise but it cannot create it. What it can do is minimise regulation, keep labour markets flexible, taxes low and simple and get the hell out of the way. This is not a message Brown should have any trouble with, because he routinely preaches this message to Europe.

Yet somehow the urge to tweak, meddle and micro-manage Britain’s economy seems harder to shake off when he is facing a domestic audience.

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