A passionate plea to the Chancellor for action to jump-start business in Britain, by SIR JAMES DYSONGeorge Osborne's brutal spending cuts remain necessary: he must stay the course.
Many of the measures are unpopular and more mistakes will be made, but there can be no wavering in the quest to rein in government waste and mismanagement.
The Chancellor is an intelligent man with a very difficult job, but he needs to cultivate as well as cut. And cultivating, nurturing, developing a new Britain is going to take time. Short- termism in business is cavalier; in politics, it is routine.
We are in the midst of the worst recession for 50 years. Quarter after quarter of gloomy economic news – the Double Dip. At least we have the Olympics to cheer us up.
No doubt the Chancellor marvelled at Danny Boyle’s Olympic pageant. And hopefully he will have been reminded of what built modern Britain and propelled its success around the world – technology.
Brunel’s tunnels, bridges, railways and ships to Berners-Lee’s worldwide web. Long-term and high-risk, but definitely worth it. Britain needs to be a good place to do business. I don’t mean City Slicker business – our obsession with the Square Mile has ensured that we remain good at making money from money – but we need to get better at making money from making things, too.
When it comes to infrastructure we seem content with a fingers-crossed attitude. Great for sport, not so for business.
The Government has shown a glimmer with its proposed high-speed rail programme. Big capital projects with big ambition. There are risks and there will be understandable unhappiness as homes are knocked down and gardens dug up.
But electrifying Britain’s spine will create jobs, ease pressure on our cities and inspire. We need young people to get excited by science and engineering – large-scale projects to galvanise hopes and aspirations for the future.
I urge the Chancellor to be bold – give Boris his island, build the airport that we badly need and make it easy to do business here. Build world-class nuclear power stations, update our water network and sewers. Revive the tidal energy project – we are an island: it makes sense! We need to rekindle that Victorian lust for the new.
George Osborne should send a signal – no pun intended – and use the forthcoming 4G network auctions to support British inventiveness. Ring-fence the revenue to create an incubator fund for technology start-ups.
Again, some businesses and projects will fail but some might be our Apple or our BMW.
Who am I to talk about making things in Britain? Yes, ten years ago I took the difficult decision to transfer the final assembly of Dyson vacuum cleaners to Malaysia – 560 jobs were lost.
The multi-million-pound factory I had built just two years earlier suddenly had a hollow echo. But it was the right thing to do. The quagmire of local planning meant I was unable to build another factory on an adjacent site.
The commodities and components needed to build our machines were being shipped in from Asia: Britain’s ubiquitous three-pin plug actually hails from Taiwan. It did not make sense (and it was coming close to not making money).
People ask me whether I built that factory with a government grant. I did not. I tried, though. A few years earlier I applied for a Welsh Development Agency grant. I worked with the WDA team and Ernst & Young and we were confident.
The process cost me £30,000. That’s £30,000 to apply. And £30,000 I did not really have after five years of trying to license my invention.
On the eve of my application being heard, it was suggested that David Hunt, the Conservative minister responsible for Wales, felt I was ‘under-capitalised’ and the proposal required a significant rework. It never got reworked – I did not have the appetite or the funds – and I decided to go it alone.
Government should back business, it should create the right environment for business, it should stimulate business, but it should not pick winners.
Today our Malmesbury factory still stands. And it is full. Not with whirring production lines, but with people (whirring minds). So many that we are having to expand; here’s hoping that the Government’s pledge of smooth planning applications holds true.
The hangar where vacuums were put together now has 900 engineers and scientists developing new technology. They invent valuable intellectual property. The other 500 people manage our global growth. It is a modern model. Our research and development occurs in the UK but final assembly occurs overseas. Like Apple. Like Sony.
Dyson is still a British exporter. We sell our products in 52 countries. The profit comes into the UK and the HMRC gets its cut – we paid more than £100 million in tax last year.
I was able to go it alone back in 1993 thanks to the patience of my family and the nerve of my bank manager at the time, Mike Page. He personally lobbied a reluctant Lloyds Bank to lend me the £600,000 I needed for tooling.
Too often UK investors are reluctant to take a punt on technology, science or engineering. The Coalition should examine new routes to get debt financing to inventive companies. If possible, this should involve using the power of government guarantees to encourage lenders to extend credit.
Labour laws should be determined in Westminster, not Brussels. British firms are hamstrung; why has it become so onerous to give someone a job? We need to make it far easier for businesses to flex their workforce, being able to quickly ramp up in a peak and to scale back during tougher times. This will give employers greater appetite for risk, and risk will give the economy the jolt it needs.
Today, a maelstrom of financial data covers the papers, immediately jumped upon by harbingers of doom. Rather than getting on with it, we fret over numbers, which are by definition, in the past.
Perhaps if the information being passed on by the Government was clear, concise and without spin, the nation would better appreciate the dire straits we are in and back the Chancellor in his mission.
Yes, there are short-term solutions that might help boost growth. Reduce the burden of tax on businesses, support their investment in research and development, and make it easier for them to recruit the best people to drive their business forward.
I would welcome a simpler taxation system – for businesses and for individuals.
And the British high street would welcome a return to the 17.5 per cent rate of VAT.But short-term is not enough. Politicians are far too afraid to grasp the nettle and invest for the long term. ‘Just get on with it,’ is the phrase that springs to mind. A five-year view is long enough in politics but not in business.
Dyson’s pipeline of new technology is 25 years long. I can’t imagine politicians waiting that long to see the fruits of their labours.
Britain’s future must be clever: high-tech research and development, the brightest minds and the world’s greatest exports. George Osborne must sit tight with his austerity, but be clear about where we are headed, laying firm foundations and letting British businesses do the hard work of getting us there.
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