I’m a Venture Capitalist but I’m not scared of the Left

It’s election time in the UK, and a feature of the campaign this time has been a steady stream of articles from business figures warning us that moving to the left will harm our business environment, hurt jobs, raise taxes, ‘return us to the 1970s’ and so on.

I’m a Venture Capitalist; after building products for Google for many years and then DeepMind I now make my living investing in early stage tech startups. So you might imagine I’d be adding to these warnings, but in fact I don’t buy them at all, for several reasons.

A lot of the anti-left coverage is emotive and weak on facts. The Institute of Fiscal Studies said that Labour’s manifesto would introduce “just about the most punitive corporate tax regime in the world”. In fact Labour’s planned rate of 26% would take the UK back to the first 2 years of David Cameron’s coalition government, on a par with the United States around 13th in the OECD list, and below Germany, Japan, Australia and Canada.

At times business leaders sound affronted — how could the left be so against us ? What I see instead is a very ambitious plan to invest hundreds of billions in enterprise, infrastructure and innovation over ten years. This doesn’t read to me as anti-business — but it is a call for business to work together with government to address big challenges.

Should governments just get out of the way and let business get on with solving these? As a Venture Investor I am interested in so called ‘unicorn outcomes’ — startups that, within a few years, become valued at a billion dollars or more. Sweden, with a rate of government spending significantly higher than Labour’s manifesto, has a rate of unicorn creation per capita that is around double that in the UK.

Similarly, Harald Eia has calculated the top 5 places in the world to become a multimillionaire (net worth > $30M) as Norway, Sweden, New Zealand, Canada and Denmark. The much lower-tax US comes in at number 13.

How can this be true ? Surely we entrepreneurs won’t bother to solve society’s problems unless governments keep our taxes low and get out of our way? Mariana Mazzucato at UCL has shown that, in fact, the state has always had an important complementary role in our biggest breakthroughs. The role of the US Advanced Research Projects Agency (created by President Eisenhower) in the creation of the internet is well known — and the EU in the shape of the European Innovation Council is now the biggest venture investor in Europe by a distance.

I’ve been working in this industry for over 20 years and I’ve yet to meet an entrepreneur who was motivated by low taxes. What you do want is an educated, healthy workforce, modern infrastructure — and a state willing to take seriously our biggest threats.

And this is the final point. If we don’t want an ambitious project to make our health service fit for purpose, get our young people to fulfill their potential, fix our housing crisis and do something meaningful about climate change while investing for the future — what do we want ? Where is the alternative ambition ? For my colleagues who fear moving to the left I’d ask — should we simply carry on as we are ?