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05-09-2017 - Modwenna Rees-Mogg - 0 comments
Heroes of the Month - Sir John Major and Ken Clarke MP

We’ve been going back a bit in time to dig out this year’s heroes of the month, but time only enhances their contribution rather than diminishes it.

Our heroes are Sir John Major and Ken Clarke MP for the simple reason that it was on their watch as Prime Minister and Chancellor of the Exchequer that both the VCT and EIS schemes were introduced.  By the end of 2015 tax year these two schemes had pumped more than £6.4bn and £14.2bn respectively into the UK economy since the mid 1990’s.  They have been massively successful at stimulating private sector (funded by private individuals) investment into entrepreneurship, given or extended life to more than 30,000 businesses, spawned the likes of Skype and Zoopla, but also everything from genuinely curative mental health hospitals, to medical devices and drugs, to helping the UK become a world leader in app development and digital media and more and more… Now the scheme is being used to back companies taking us into Space. 

Angels of the world should give a cheer for Sir John and Ken too - on the international stage they have been the precedent for tax break schemes all over the world – Portugal, Turkey and as far afield as Australia  Now there’s a post Brexit bit of PR, the Government should be banging on about.

More importantly prima facie the schemes have created 100,000s of jobs, new jobs, value added jobs for the UK economy and the return on investment for HM Treasury, even though it is not accounted for in this way because of audit rules, will have been in the £100s of billions thanks to company payment of PAYE, VAT, Corporation Tax, business rates and all the miscellaneous other taxes paid by the portfolio companies in the last two decades.  I have estimate that in fact HM Treasury, thanks to these schemes is in fact the most successful venture capitalist in terms of returns delivered in the UK!

To the “low tax break, no subsidy” and “these are tax breaks for the rich” brigade whom no doubt our heroes also had to deal with back in the 1990s, to the first, I say, lower taxes and then remove subsidy not the other way around or risk killing the UK’s golden geese.  To the second, I say, with the advent of crowdfunding and the nature of VCTs as quoted companies in which anyone can invest as little as one share for a £1 – these schemes are democratic, egalitarian and represent the best of UK capitalism. 

I wonder if Sir John and Ken realised just how much they would achieve for the UK and its citizenry way back then?  I am uncertain where the geographic locus is for UK enterprise but statues of these gentlemen should be placed at its epicentre. 



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