Click here for printer friendly page

BVCA chairman calls for renewed commitment to economic reform in Europe

BVCA chairman Michael Queen will use a keynote speech on Tuesday to call for more strenuous efforts among policymakers to ensure that Europe's economy does not fall further behind the US, citing the fertility of landscape for venture capital investment as an essential part of that ambition.

‘We can compete and perform,' he will say, ‘but it requires political leadership - brave, tough decisions - the benefits of which will, however, only flow through beyond the normal electoral cycle.'

Queen will stress that the BVCA applauded various reforms implemented by the present UK government, including granting independence to the Bank of England, the establishment of the Financial Services Authority, and the creation of the ten per cent capital gains taxation rate of entrepreneurs.

But he will also emphasise that it is important for the UK to take the lead in Europe in the implementation of more wide ranging economic reforms that will allow the EU to become ‘the most dynamic, competitive and knowledge-based economy in the world by 2010' as was agreed at the Lisbon summit of 2000 by EU heads of state. He will say that in the three years since this commitment was made Europe has gone backwards.

‘We need to create an environment at least as attractive as the US - recent tax reductions there may attract criticism from political commentators but they send a powerful message to the business community that this is a great place to do business.'

Queen's four criteria for the success of the European economy going forward are: people; productivity; fair taxation; and an efficient public sector.

The first and second components, he argues, will best be addressed by attracting an influx of talented immigrants to offset the demographic concern of an ageing population. He refers to the recent US tax package as an example of how government can signal its support for business.

Finally, he will argue that the government needs to rethink its treatment of the public sector completely to overcome substantial ‘inefficiencies'. ‘To be a successful economy we need a radically different approach to the provision of public services that puts the recipient of the service at the heart of the model and creates incentives for the producer to improve value and quality,' he will say.

Copyright © 2003 AltAssets.