State control means there is little space for people to help people
UK tax incentives for investing in small businesses become rigid and complex in local hands, writes Peter Curle
When Margaret Thatcher came to power in the UK in 1979, that country’s economy was in a parlous state. After more than 30 years of socialist, bureaucratically controlled management, Britain was the "sick man" of Europe. The economy was limping, with no growth and high unemployment. She introduced several reforms, very quickly, which had a major effect over the following years in turning the UK economy into the second-largest in Europe and one of its most vibrant. One of the most effective mechanisms was the Enterprise Investment Scheme. Under this, any taxpayer investing expansion capital in a small business obtained very significant relief, in terms of income, capital gains and inheritance taxes. The government understood that the small business sector was the prime engine for growth and employment creation. It also appreciated that the catalyst for igniting this sector would be private money, encouraged to invest through tax relief, rather than direct state bureaucratic interventi...
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