V for Venture
by Calum Benson
In 2006 the Conservative party changed its image. Out was the flame of progress, in was the tree we know, and perhaps love, today. It symbolised a new vision of conservatism: proud of its environmental credentials – hands up who remembers being asked to “vote blue, go green” – and engaged on a whole range of social issues that had for the previous decade been surrendered to New Labour.
That was then. Today times have changed significantly. Emerging from the most severe recession in living memory, the mirage of eternal economic growth is long gone. The Conservatives themselves are not in the position they thought they would be, forced to govern in a (surprisingly serene) coalition with the Liberal Democrats.
It is into this environment that Demos has today released its most recent publication, 'Reinventing Venture Capital'. And its conclusions deserve to be considered by the Coalition leadership.
It suggests that venture capital can play a meaningful role in encouraging the new, innovative companies that could deliver the kinds of technologies Britain needs to develop a vibrant, low-carbon economy. By simplifying the apparatus of existing state support for venture capital, encouraging a freer flow of resources into venture capital and aiding in the recruitment of venture capitalists of a global standard, the Coalition can, the report suggests, help to rebuild a globally competitive, and environmentally sound, economy.
Except that is not the end of the story. Policy is as much about politics as it is anything else, and today anything that even sniffs of high finance is politically toxic. Hell hath no fury like an electorate who think their taxes are going to bankers. Venture capital is not banking, not even close, but in the current charged political climate it risks being tainted by association.
So a test for the Coalition presents itself. 'Reinventing Venture Capital' offers one way to build a new, green economy out of the ruins of the old one, without growing the state. Whether the Coalition adopts its suggestions and risks public ire for long-term gain, or whether they play safe and keep mum, will provide observers with real clues as to whether they are truly prepared to put principles ahead of politics.