“Startup businesses back the Conservatives,” screamed last week’s headline in The Guardian newspaper.
In a move that feels somewhat unprecedented for the U.K.’s startup scene, which isn’t especially known for ‘doing politics’, more than 90 tech entrepreneurs have signed a letter declaring their support for the return of a Conservative-led government and the continuation of the incumbent administration’s tech startup-friendly “attitide” and policies.
Urging voters not to “change course,” the letter says that jobs, growth, and innovation would otherwise be put at risk, specifically citing a number of tax breaks and other U.K. government schemes that its signatories say have helped to boost investment in the country’s startup scene. The startup founders and VCs, who all signed the letter in a personal capacity, write:
Key have been schemes to boost investment in startups, such as the Enterprise Investment Scheme and Seed EIS, which have created the best environment for venture capital in Europe; and the R&D tax credits and the Patent Box, which have helped make innovation pay. We want to see these schemes continue after May’s general election.
But while the letter’s intentions are clear — to help return a Conservative government — and echo similar campaign letters signed by big business and traditional SMEs, its unprecedented nature and list of signatories have raised a few eyebrows.
The U.K. startup scene isn’t known for being so publicly partisan, and with the U.K. general election on a knife edge, and the almost certain likelihood of a minority or coalition government and the real possibility that the incumbent Conservatives could leave office, the stakes couldn’t be higher.
The letter also leaves a number of unanswered questions. How did it come about? Was it instigated/organised by the Conservative Party or the tech community? How well-represented is the U.K.’s startup scene in the list of signatories? What existing ties do the signatories have to the U.K. government and/or Conservative Party? And what are the tech entrepreneur-friendly policies being credited to the incumbent Conservative-led administration that the signatories claim will be put at risk if voters “change course”?
The public face of the letter and arguably most high-profile signatory is Brent Hoberman, co-founder of Lastminute.com and PROfounders Capital. He’s also thought to have been its main, though not sole, organiser.
Noteworthy is that Hobermam is currently a government adviser, as a member of the government digital services advisory board (GDS) and was appointed to be the U.K. government business trade ambassador in 2010. In the New Year, the Eton-educated entrepreneur was also made a CBE.
Interestingly, however, he was actually appointed by Labour Prime Minister Gordon Brown to the The Business Council for Britain in 2009. So, in fairness, he’s worked with both Labour and Tory-led administrations.
“Yes I instigated it,” Hoberman told me in an email. “I know most of the top tech entrepreneurs well and was encouraged to do this by their positive energy and fear of the rhetoric from Labour. I have been driven to be this political due to lack of tech and entrepreneurship engagement from other side. Countered by positive engagement from this government.”
(The lack of engagement with the tech community from the “other side” — the Labour Party — is a topic raised by many U.K. tech entrepreneurs I spoke to when researching this article, both those who signed the letter and those who declined to, and something we’ll revisit below.)
Hoberman is also a non-executive director at Guardian Media Group, the parent company of The Guardian newspaper where the letter was published. That in itself is interesting, given that the newspaper has come out in support of a Labour government in contrast to the letter’s signatories.
It’s my understanding that although Hoberman was the instigator of the letter and its main organiser, he wasn’t without assistance. One of those who helped was Daniel Korski, a Conservative Party campaigner who until recently was a special adviser to Prime Minister David Cameron.
According to sources, Korski began ringing around potential signatories at the start of April to let them know that Hoberman was organising the letter and with the presumption they would sign, which not everybody did. The letter was originally targeting 100 signatures. One person, who was asked by Korski to put their name to the letter but declined, told me they were a little peeved that their support had seemingly been taken for granted.
Meanwhile, Korski could be considered well-placed to know which tech entrepreneurs would be sympathetic to lending their support to such a letter. After Tech City architect Rohan Silva left his role as a government adviser, Korski picked up some of the slack, I’m told, such as hosting Tech City breakfasts at No. 10 Downing Street, which numerous signatories have attended.
As we might expect — given the government’s unwavering support for Tech City — the representation of tech entrepreneurs is somewhat skewed towards London and Tech City (Silicon Roundabout) in particular.
It also includes ties to known supporters of the current administration. For example, Joanna Shields is a Tory peer, although you don’t have to look hard to find others. In that sense, it could be argued the letter is no more significant than Tory supporters supporting the Tories.
However, as I’ve already stated, it still feels somewhat unprecedented for members of the tech community to speak out in such a partisan way. For example, Accel VC Sonali De Rycker is a signatory, despite rarely if ever talking publicly on such issues. Another VC, Passion Capital’s Eileen Burbidge, who signed the letter, told me in an email:
For me personally, I’d previously stayed out of being publicly political because it’s in my interest to work with whomever is in Government (regardless of party) — and frankly as a first time voter I simply didn’t pay much attention to which party was in power, opposition or otherwise. However, as this is the tightest general election in a generation *and* after I made a concerted effort to spend time with all 3 major parties to engage on tech/digital over the last year and a half, it became clear to me which party “gets it” more than the others.
The letter’s signatories have all signed in a “personal capacity” (even though they also add their associated company’s name right next to their’s). This has led some to point out that many of the signatories might not even be eligible to vote in a U.K. national election because they don’t have the required citizenship. In fact, at least two don’t even live in the country! Whether or not that‘s relevant, I’m not entirely sure. Free speech is free speech after all.
And whilst the letter could be viewed as a coup for the Conservative Party, it only represents a fraction of tech entrepreneurs, and not everybody who was asked to sign did.
One of those who declined is Wendy Tan White, co-founder and CEO of Moonfruit and an adviser to Tech City UK. In an email she explained:
I’m instinctively left of centre, a progressive. I do support a lot of the digital initiatives put in place by the coalition, SEIS, fast track visas, gov.co.uk and TechCity etc. But I’m uncomfortable being part of a highly partisan election campaign. The digital letter was the third in a sequence, the first two being from corporate leaders and then SMEs. It’s not been an impressive election in terms of pro-business policies but I’m especially disappointed that current Labour positioning does not more actively embrace digital policy and entrepreneurs. It had the opportunity to build on initiatives like ECF [Enterprise Capital Fund] and Innovate UK, set up by BIS during the New Labour years. If Ed Miliband became prime minister he’d have to try harder.
Another investor and entrepreneur I spoke to who was asked to sign the letter but chose not to, cited Europe as the defining issue. Unlike Labour, the Conservatives have promised an EU ‘in/out’ referendum, a policy not mentioned in the letter published in The Guardian. Should that happen, and should the British public vote ‘yes’ to leaving the EU, that would certainly constitute a change of course. “EU membership is probably the single-biggest ‘business’ issue in the election,” said the person who wished to remain anonymous.
It’s also worth remembering that EIS, R&D tax credits, and the Patent Box, which the letter cites as entrepreneur-friendly policies, were initiatives created by the previous Labour administration, although the current government has extended them, specifically Seed EIS, which has undoubtedly given a boost to (very) early-stage funding of startups.
It could also be argued that credit for the continuation and extension of these policies should be given to the Liberal Democrats, not least Business Secretary Vince Cable.
However, once again you can’t help wondering if Labour hasn’t scored an own goal by not doing a better job of courting the tech community and giving reassurances that such policies will remain should it be elected.
With that said, Labour’s Chi Onwurah has been doing a lot of digital outreach, such as the women in tech roundtable TechCrunch covered recently. There’s also initiatives like Labour Digital, which are helping to shape the party’s tech policies.
Tony Blair’s spin doctor Alastair Campbell famously declared “we don’t do God.” And you have to wonder if it’s wise for tech entrepreneurs to “do politics,” especially as there could well be a change in government in just a few days — a government they will have to work with and operate under either way.
In this context, founders and VCs might do well to heed Richard Branson’s advice:
Businesses have got to maintain strict impartiality when it comes to competition issues. If you do end up supporting a political party, if they ever end up making a decision in your favour, it looks bad all round. If you go against a party and they make a decision against you, it looks equally bad.