City A.M. article: We need to free the disruptors and let businesses off the leash

This article was first published in City A.M.

In Britain, we have a new generation of self-starters, desperate to upset the odds and shake up the hierarchy. From the bedroom-based app-developers of Peckham to the fish-processing innovators of Grimsby, I believe that our future lies in cultivating their maverick spirit.

We need to let businesses and individuals off the leash, and give them the freedom to succeed.

Too often, however, bureaucracy stands in the way. And for this entrepreneurial generation, the twin issues of regulatory red tape and a housing sector mired in nimbyist restrictions risk stifling a new wave of innovation before it can get started.

Across the country I see businesses with ambition, and entrepreneurs with ideas that could change the world. These are thoroughbreds that have the power to race away from the competition.

The government should do everything it can to free the disruptors to bring life to the market. And, as chief secretary to the Treasury, I aim to be the disruptor-in-chief. I will challenge anyone with a stake in the status quo – anyone that tries to crush creativity.

Sometimes, traditional businesses face regulatory barriers that disruptors don’t. One guesthouse owner in my constituency had to gain two licences to let his guests listen to the radio; people letting their flat on Airbnb don’t have to worry about the same restrictions. This is clearly unfair, but the answer isn’t to increase regulation, and keep everyone back.

Instead we need to reduce barriers for everyone, and level the playing field – we should reward businesses with the brightest ideas, rather than those with the biggest legal departments.

It’s not just businesses that are held back by paperwork. Access to affordable housing is one of the burning issues of the day. While this government has delivered more affordable homes in the last seven years than the previous seven years of the last Labour government, it’s still the case that too many young people struggle to get homes near their jobs.

And why is this? Too many people who got themselves on the ladder have been allowed to pull it up behind them, using the system to block planning applications. Our house-building rate peaked in the 1830s – long before we had cranes and diggers – simply because there were fewer restrictions.

It’s completely wrong for nimbys, sitting in their comfortable homes in the south east, to deny opportunities to others. The average earner would be £2,000 better off if they were able to move jobs and location, but since 2001, the share of working-age people relocating has gone down by 25 per cent. This is hurting businesses, too, because they’re being denied access to talent. If we could sort this out, it would give a huge boost to individual workers, and to the economy.

A recent US study showed that freeing up housing regulations in New York, San Jose and San Francisco to median levels could increase America’s GDP by 3.7 per cent.

In Japan, things are different. In the early 2000s, urban development rules were relaxed, giving people the freedom to change their property as they see fit, while commercial developers are free to do as they please in designated zones. Whereas house prices doubled and quadrupled in London and San Francisco, they were much flatter in Tokyo.

We should learn from this approach. At the very least, we should densify our built environment, and look at making it easier for local neighbourhoods to raise the height of their houses.

There’s no more important time to be thinking about all of this. After building ourselves back up from the ruins of the financial crisis and launching the Brexit process, Britain has a unique opportunity to re-establish itself as the land of the free.

We already have a strong base, with an impressive number of startups, and record levels of employment. But if we get the next phase of our development right, particularly for the upand-coming generations, and liberate every part of our economy, we can truly turbocharge growth.

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