This may be the basis for an entrepreneurial wealth fund with the patience to thrive
In most ways we hope that Rishi Sunak has no legacy as Chancellor, and if he is being honest he would probably share that view. We hope that he won’t be paying the wages of half the private sector workforce for very long.
Nor that he will be lending money to the bulk of the country’s companies, or bailing out airlines, or postponing tax collection indefinitely.
With any luck, all of his initiatives will be swiftly consigned to the history books. There could, however, be one exception. His start-up rescue fund.
The Chancellor is responding to a dire emergency in funding for new businesses. And yet, it has the potential to be a far bigger idea. With the right people in charge, it could be the basis for an entrepreneurial sovereign wealth fund.
The UK has a great record of creating new products, and starting new companies, but it has often been poor at backing them over the long term. With equity stakes in a range of companies, the fund could give new businesses the long-term backing they need – and create a lot of wealth for the country in the process.
Most of us will welcome Sunak’s decision to launch a rescue package for Britain’s start-up companies. Lots of people – including this column – were urging him to move as fast as possible.
Over the last few years the UK has developed one of the most entrepreneurial cultures in the world. London is never going to match San Francisco and Shanghai as a tech hub, but it has moved into third place, and become the leading centre in Europe, and that is a formidable achievement for a medium-sized economy.
Cities such as Manchester, Bristol and Glasgow have been building start-up clusters of their own that are every bit as successful. But it is virtually impossible to raise fresh money during this epidemic, and even harder to launch a new product. It would have been tragic to see all that thrown away.
With so much money being spent, start-ups are just as deserving as any other sector – and as they are the growth businesses of the future arguably more so.