With the recent global credit crisis, the American and European governments have taken unprecedented steps to try to bring confidence back into the market. The UK government now has a controlling interest in RBS, and 44% of Lloyds TSB and HBOS. This intervention seems to have given some relief from what at times looked like an absolute meltdown of the banking industry.
The call from politicians is that bankers, who are blamed for causing the credit crisis, are going to be under much tighter restrictions. My fear is that enterprise is going to be viewed differently now. It’s inevitable that once the immediate crisis has subsided they’re going to be looking seriously at how to put more control into the system.
My main concern is that as they put more controls in, the box-tickers and administrators are going to take over the running of businesses. And if there’s
one thing we entrepreneurs know, it’s that box-tickers
are a killer to enterprise, and I think this could have a devastating effect in the long run.
In the short term it’s offering us relief, but bringing in more procedures will make going into business harder. In a relatively short time, I foresee that those of us who have our own businesses may find it very difficult to run them.
Undoubtedly, we’re now in a climate of caution. But being entrepreneurial means being prepared to take a risk. In this country, entrepreneurialism has become quite fashionable and a path many young people feel excited about taking, yet now I envisage a lot of people looking for safer opportunities.
I fear for entrepreneurs because they will be, in a sense, treated as second-class citizens. More and more entrepreneurs will find it difficult to raise money, which is vital for any new idea. I wouldn’t be surprised if this is the last series of Dragons’ Den, because that’s all about backing entrepreneurs. I think we will be tarred with the same brush as the bankers who got us into this situation. As people are hurting and struggling, those who’ve made loads of money from their success will not be fashionable.
For entrepreneurs, it’s going to be a sad time. Perhaps anyone with entrepreneurialism in their blood will have to leave the UK for a country that hasn’t been as scared as we have. Banks might have the funds available now, but if the people who are going to decide whether they invest in your business are those who have been so frightened, they’re not going to be taking chances like they would have done a year ago. Whatever funds the government is making available, banks are still going to be cautious and it’s going to be hard to get money out of them. The only way to really stimulate entrepreneurship is to take the decision-making away from the banks.
When you start nationalising, you’re taking control away from entrepreneurs. I just don’t think that people will have the stomach for risk-taking.