If Labour wants growth, they need more business brains and less work from home

With a cabinet and a board of trade overflowing with business virgins, we need more than investment bankers and twentysomething “spads” advising this government.
Strategic business growth requires extensive, practical domestic and international experience. While the economists, lawyers and bankers who seem to have the ear of ministers will tell you all about historic events and theory, successful chief executives and founders of businesses will supply insight on overcoming myriad challenges faced by companies — from legislative hurdles to unforeseen circumstances.
We need these experts — not just from big corporates but leaders of small and medium-sized enterprises (SMEs) — actively advising and guiding this government, with the aim of making UK plc a thriving concern for businesses, entrepreneurs and investors.
That does not mean imposing naive and impractical rules that make it harder for companies to employ people. Take last week’s idea of making flexible working the default for most employees; the business minister Jonathan Reynolds says working from home boosts productivity, but the facts just don’t bear this out. A report from Citi, published just as his workplace reforms were announced, showed that productivity in work-from-home Britain had slowed to the “dire” pace of 1850 Victorian England, well behind Europe and the US.
Demanding work needs to be done, and it’s done with a team being physically together, generating ideas and a frisson of competitive thoughts.
Chancellor Rachel Reeves says she tries to lead by example by being in her office every day to encourage this. In contrast, the public sector’s reluctance to return to the office sets the wrong example and is instrumental in the dumbing-down of our workforce, slowing growth and wellbeing.
That’s because, without structure and community, graduates struggle as they start out in the job market. New incumbents need to learn from senior peers by watching them at work, eavesdropping on their conversations, sitting in on meetings and paying real-time, real-life attention to the skills required for success. The nuance of pragmatism and compromise is being eroded because a whole generation has never witnessed it in play; Microsoft Teams favours the loud and bombastic, not the thoughtful and considered.
There will always be exceptions to the rule, but I know that a “Zoom Americano” will not keep the hospitality industry afloat, nor a “virtual manicure” a nail bar. Our struggling city and town centres need the flow of office workers to regenerate, and the commercial property sector needs an urgent shot in the arm.
While employees in services such as retail and hospitality have long been back in the workplace, office staff seem to demand work-from-home as some desk-related right. They cannot have their freshly baked cake and eat it.
Working in isolation is damaging to the mental health of every generation, but our young are particularly badly hit. As the years go by with them working from home, many will lack the ambition and drive required to create growth as they pursue a slower-paced and lonely way of working, where mediocre is acceptable.
With 40 per cent of young employees suffering from anxiety, it’s time for some tough love. Because after liquidity, finding good staff is any business’s greatest challenge. The intellectual curiosity, high standards and dogged relentlessness needed for high-growth businesses are hard enough to find, so the government’s “day one” changes to employment law — including reducing the current two-year qualifying period for protection from unfair dismissal to just one day — will compound this problem.
Onboarding new employees and getting them up to speed costs time and money, so rigour is applied to the process. But we all make hiring mistakes. The government points out that it has created a nine-month probationary period but it should be 12.
Meanwhile, “day one” employee rights to maternity, paternity and long-term sick leave will remove the ability to sift out the bullshitters and the workshy before they abuse these rights, putting business growth and finances at severe risk. Employers will have to reduce headcount and shift back-office functions overseas. They will hire only self-employed staff for short periods and specific tasks, all of which will further slow growth.
Businesses looking to invest in people need a backstop to know that if they get it wrong, or the system is abused, it’s not going to break them.
To attract a treasure chest of private investment to grow British businesses requires a very considered and attractive risk-reward profile for investors. The UK has got this right with the Enterprise Investment Scheme for start-ups and scale-ups — although it needs revision — but bigger businesses wanting to expand and grow overseas require funding far beyond these levels. We won’t get that unless we make the investment environment as friendly and risk-free as possible.
On that subject, raising capital gains tax will adversely change the risk-reward profile for investors. This, in turn, will slow investment in UK employers, ultimately pushing our growing businesses and their founders to more tax-welcoming countries.
It seems this government will never pop its business cherry, so listening to those who have is essential. Otherwise, knuckle down for a painful period of stagnation.
Joanna Jensen is an entrepreneur, angel investor, non-executive director and chair of the Enterprise Investment Scheme Association