Private Business Commission launches to tackle urgent challenges facing British companies

A new Private Business Commission launches today to address the UK’s growing inability to scale and retain private companies. Chaired by Steve Rigby, co-CEO of Rigby Group, one of Europe’s largest technology businesses and investors, and supported by The Entrepreneurs Network alongside eleven expert commissioners from the worlds of business, finance, and politics, the Commission seeks to build an environment in which large private companies can thrive.

With an increasing number of promising businesses floating overseas or selling up before they scale, the Private Business Commission sets out to recommend reforms to the tax system and improve access to capital markets for the UK’s private companies, which turn over £4.5tn annually and employ 27 million people.

The UK is home to just 4% of the world’s largest companies, a drop from 20% two decades ago. Commissioners working alongside Steve Rigby to reverse this decline include Chris Hulatt, co-founder of Octopus Group, finnCap Group plc founder Sam Smith, and Janine Hirt, CEO of Innovate Finance.

The launch comes at a critical time for private companies in the UK, with a number of significant policy interventions aiming to stimulate growth in this crucial part of the economy. These include  the Mansion House Reforms, which aim to channel more capital from pension funds into early-stage businesses, and plans announced at the Budget that pave the way for companies to have their shares bought and sold on exchanges.

Addressing four key themes, the Commission will identify new policies to encourage businesses to thrive and scale up domestically, with recommendations to be published in summer 2024.

The four areas covered by the Commission are:

• Access to funding: Access to capital is crucial for businesses looking to scale. The Commission will investigate the current state of the funding ecosystem in the UK, including venture capital availability, government grants, and loan schemes. It will look into barriers to funding and propose reforms to improve the funding landscape.
• Tax incentives: High tax rates, complex tax regulations, and lack of sufficient incentives are deterring businesses from scaling up within the UK. The Commission will explore how the current tax regime can be reformed or improved to make the UK more attractive for businesses aiming for growth.
• The functioning of capital markets: The ability to raise capital through public markets is a vital aspect of a business’ growth journey. The Commission will examine the efficiency and accessibility of the UK’s capital markets and their attractiveness compared to other countries. This will involve looking into regulations surrounding initial public offerings (IPOs), the liquidity of the markets, and the institutional investor landscape.
• Employee incentives: A skilled and motivated workforce is essential for a business to grow and thrive. The Commission will consider how employee incentive schemes can be optimised to attract and retain the best talent. This might include tax-advantaged share options, profit-sharing schemes, or other benefits that align the interests of employees with the long-term success of the business.

Steve Rigby, chair of the Private Business Commission, said: “It is deeply worrying, not to mention damaging to the economy, for so many British businesses to sell or list abroad before they reach their full potential. We need to recognise the urgency of the problem and put in place tax incentives and funding frameworks that encourage British businesses to grow until they are large enough to properly contribute to the economy by paying tax and creating employment. Our mission is not to prevent businesses from relocating or being acquired, but rather to create a more conducive environment for them to thrive and scale up in the UK.”

Sam Smith, founder of Finncap Group, said: ““This is an area of the economy that requires urgent attention, but has long been overlooked. If we can scale businesses at the same rate as we start them, this would solve our productivity challenges and unlock serious growth. As the founder of a British business that scaled over more than two decades, I’m excited to be one of twelve leaders coming together to drive serious scale and nurture startups until they become world beating companies. I am hopeful that we can create an environment conducive to big business growth at a time when the UK economy desperately needs it.”

Philip Salter, founder of The Entrepreneurs Network, said: “With the right suite of policies, the UK can incentivise and support more firms to scale to their full potential in the UK. By drawing on the experience of top business leaders and policymakers, the Private Business Commission will be a playbook for the future government in turbocharging economic growth.”

The full list of commissioners is:

• Steve Rigby, co-CEO of Rigby Group
• Chris Hulatt, co-founder of Octopus Group
• Sam Smith, founder of finnCap Group plc
• Janine Hirt, CEO of Innovate Finance
• Toby Orr, founding partner at Shearwater Global
• Sam Dumitriu, head of policy at Britain Remade
• Valentina Kristensen, director of growth and communications at OakNorth
• Philip Salter, founder of The Entrepreneurs Network
• Jan Zeber, head of policy at Bradshaw Advisory
• Jonny Clark, head of investment programmes at Capital Enterprise
• Irene Graham, CEO of Scaleup Institute