Labour has launched a review of business startup funding driven by a group of industry leaders including the former Goldman Sachs chief economist and Conservative Treasury minister Jim O’Neill as it attempts to improve its credentials with business. Announcing the review amid concern over the strength of the British economy, Rachel Reeves, the shadow chancellor, said Labour wanted to make Britain the best place in the world to start and grow a business. The review will examine issues including access to long-term finance for new companies, the incentives for growing businesses in the UK, the role of universities, and how to boost diversity among British founders and entrepreneurs. O’Neill, recruited by George Osborne as a star private-sector signing to lead the government’s “northern powerhouse” project, will sit on the review panel alongside entrepreneurs and academics. Now the chair of Northern Gritstone, an investment company launched by the universities of Leeds, Manchester and Sheffield, O’Neill quit and resigned the Tory whip in 2016 after falling out with Theresa May’s government. Other members of the panel include Alex Depledge, the chief executive of online home improvement platform Resi; the technology entrepreneur Tom Adeyoola; and Julie Devonshire, the director of entrepreneurship at King’s College London. The review comes as Labour attempts to make inroads with company bosses to demonstrate its support for business. Senior figures within the party believe it has an opportunity to build closer ties in company boardrooms, as the Conservatives under Boris Johnson trashes their reputation as the natural party of business. Over the last year, Reeves has announced plans to support UK companies through a proposal to replace business rates with a new system and proposals to buy, make and sell more in Britain.
Successive governments have sought to boost the number of startups in Britain to rival the growth of internet giants in the US, amid business community concerns over a lack of finance and a trend for high-growth tech companies to list their shares in New York rather than London. The chancellor, Rishi Sunak, has launched a £250m loan scheme for high-growth firms called the Future Fund, alongside other programmes and government reviews into post-Brexit City regulations designed to encourage investment in Britain. Reeves said problems remained: “Something I have heard repeatedly from businesspeople is a real worry about the small number of startups listing in the UK and the stubborn obstacles preventing many of them from scaling up. “Labour’s mission is to build an institutional ecosystem offering the market the access, finance and skills that new and growing businesses need.”