Liberal Democrats Party Conference: The new economy - the role of high growth businesses

Date: 19.09.2011 18:15 - 19:30

Location: The Victoria Room, Baskerville House, Centenary Square, Birmingham, B1 2ND

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This discussion included the Rt Hon Danny Alexander MP, Chief Secretary to the Treasury; Vicky Pryce, Senior Managing Director at FTI Consulting and Henry Raine from Wonga. NESTA's very own Director of Policy and Research, Stian Westlake chaired the discussion.

Vicky Pryce started the discussion by outlining where she thinks the debate on economic growth ought to be focusing. She stressed that the private sector should contribute more, particularly given that the public sector is shrinking; that businesses should be investing in their export markets and taking advantage of the weaker pound and that more needs to be done to increase business confidence.  In all of this, Vicky views innovation as highly important and identifies it as the common factor in 'consistent and persistent' growth regardless of location or sector.

Policies to support economic growth should be viewed as long term and money should be targeted to deliver this with science, technology and education amongst the recipients.  Vicky saw NESTA's ability to bring people together to gather the power of collective influence as something to be welcomed and built upon.

Henry spoke with real passion describing the challenges, successes and failures of Wonga, recently awarded the Sunday Times Top Tech award.  He identified regulation and access to finance as significant barriers to start-ups in the UK whilst also saying that he is proud of Wonga's success and proud that they are a British company.

Danny Alexander described the need for deficit reduction 'as read' and was keen for the debate to explore how economic growth could be improved.  He articulated his ambition for the UK to be the best place to start and grow a business - diversification of the economy is key to embracing all of the skills and talents the UK has to offer.

In agreement with Vicky, Danny focused on placing skills and education at the heart of the long term approach to economic growth citing the government's apprenticeships and pupil premium policies as being at the heart of this.  Crucially, Danny highlighted that infrastructure 'is the essential barrier or facilitator to growth'.

In response to questions from the audience and points raised by Henry, Danny acknowledged that access to finance is 'one of the knottiest and most challenging problems we face' and was clear that the tax system needs to create a favourable environment for entrepreneurs.

There was a considered set of questions posed from the floor which will have given the Chief Secretary much to think about.  The system of R&D Tax Credits was called into question with opinion voiced that the system is too structured around the manufacturing sector.  There were also questions asked about long term investment for growth with multi-national companies stating that they are in the process of taking decisions about where to invest for the long-term.  Flexibility to self-design apprenticeships to create a workforce trained to the precise requirements of a business was viewed as a strength.  Investment in green technologies was raised as a particular issue with most interest coming from foreign and angel investors.

The event ended with a final plea to government to bring together networks of individuals with experience and interest in finding solutions to economic growth so that innovative ideas could be generated.