Brewdog founder James Watt on Britain’s ‘existential’ debt crisis
Founder of beer chain Brewdog has warned Britain’s political system faces an “existential crisis”, and has offered a solution to get on top of it.
James Watt took to LinkedIn to vent his frustration at the levels of debt being serviced in the UK economy at the moment, which makes it “impossible for us to get our governing system back into balance”.
He warned unless something changes very soon, it would lead to the “self-destruction” of the governing system.
Watt, who quit as head of Brewdog in May after 17 years at the helm, has long been a critic of the Conservative government’s treatment of hospitality in particular.
Since quitting Brewdog, Watt launched a new business called Social Tip, a platform that allows users to become ‘influencers’ and earn money for promoting brands.
In an impassioned social media post, he said that rising taxes, falling levels of services, and the amount of interest paid on debt, are making governing almost impossible.
Ahead of the Budget at the end of October, he claimed that “in a few weeks, Labour will push taxes well beyond their previous high-water mark. The average UK family can expect 75-80 per cent of the money they earn to end up as tax.”
This comes as the number of business owners who fast-tracked selling their companies over the past year has increased due to fears around a possible tax raid in the Budget. 23 per cent of business owners surveyed, who had fast-tracked their exits, did so because they were worried about a capital gains hike.
It was also reported this week, that capital gains tax could be hiked by Chancellor Rachel Reeves to almost 40 per cent in the Budget.
Watt also warned that taxpayers are paying more than £100bn a year, £300m every day, to pay interest on the national debt – while levels of services are declining.
Watt called for incentives to be put in place, adding that as taxes surged “there are fewer and fewer incentives in the system for job creators and wealth creators.”
“Quite simply this means they will create businesses, jobs and wealth elsewhere in the world.”
He accused politicians of throwing “mud at each other” so that “economic policy becomes conflated with political point scoring”.
“We are having political arguments on topics that should not be political.” He said “most political discussions should actually be grounded in economics primarily– with maximising the economic prosperity and wellbeing of UK families being our only north star.”
“In business first and foremost you need to balance your books, only thereafter do you earn the right to discuss strategic options. The same principle needs to hold true for our governments.”
He proposed a solution to make it “illegal for any government to further increase our national debt during their term in office”, but bemoaned it is “something that our politicians would never do.”
He said unless things change and national debt can be tackled, “it may already be too late for the UK.”
Yesterday, over 100 major London-listed companies, including Fevertree Drinks and YouGov, wrote to the Chancellor warning that the uncertainty surrounding the future of a key tax relief tied to London’s junior stock market is battering investor confidence.
The letter, reported by Sky News, said that reports suggesting the government could end the inheritance tax relief on AIM stocks “has significantly impacted the ability of AIM businesses to raise capital”.