Small Business

Kevin Hollinrake MP: ‘I’ve never written a business plan for a new business’

Oct 2, 2025 5 hours ago

Welcome to Small Business Snippets, the podcast from SmallBusiness.co.uk. Today’s guest is Kevin Hollinrake, chairman of the Conservative Party.

Ahead of the Conservative Party Conference 2025, Kevin shares his views on the small business landscape with Stubben Edge managing director, Chris Kenning.

Listen to the audio version of the interview below.

Alternatively, you can watch the full interview or read the interview transcript further down the page.

[embed]https://www.youtube.com/watch?v=VJGEX45y3X0[/embed]

Filmed and edited by Bruno Mameli.

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Kevin Hollinrake MP interview transcript

If you’d prefer to read Kevin’s interview, here it is.

Kevin, it’s very good to see you, you founded your own business as a former small business minister. Since you became party chairman, what have the Conservative Party been doing to engage with small business owners?

Kevin: Well, quite a lot. I mean, you know, I think I’m glad you say small business because too often, for me, I’ve been in politics for 10 years, I’ve been a Member of Parliament for 10 years, 8 years of that was sat on the back benches. And I, like a lot of people, I guess, am frustrated by sometimes the rhetoric coming out of government, whoever the government of the day was.

Sometimes, talking about business, you talk about big business like Google and Unilever, and these are great companies employing lots of people and spending lots on research and development.

Of course we want them here, but really, to my mind, having been a businessperson myself, starting a small business and taking it into a large one, it was, that’s where it’s at. That’s what creates the dynamic effect in the economy. So, which is we’re engaging with all businesses here and we need to do, reconnect.

Small business is the priority, in my view, and so what are we doing? Okay, so we’ve got this Conservative Business Network, a new club that people can join.

You can go on our website or email [email protected]. That’s our advert for the interview. So, because we want to have the conversation. And as well as that, we’re actually doing some outreach, I think it’s called, where we email out businesses and say, come on a call with us.

Talk to us about your business challenges. We want to hear from you. And we want make sure as we develop our policies, one of the nice things about being engaged with us right now is we’re kind of fertile ground for good ideas, particularly with small businesses, how we improve their lot.

So doing that, we’ve got the SME Business Day, a conference. Our conference runs from the October 5 – October 8.

We’ve got an entire day focused on small business, small and medium sized businesses, which is great. So, there’s networking opportunities there amongst each other, but also I’ll be there, Mel Stride, our shadow chancellor’s there, our business ministers will be there. And some really motivational speakers from the business world. Debbie Wasco, a brilliant businessperson.

She’ll be there too. So lots of things going on there to try and make sure that we again recognise, as I absolutely believe we are the party of business, particularly small business.

And if you were back in parliament at the next election, do you think IR35 would stay in situ or do you think you should be encouraging small business people and consultants to incorporate and start building up some capital in their business?

Kevin: Well, I know that IR35, the changing of rules, has made things very difficult for a lot of people who are genuine contractors. And that wasn’t the purpose. And often when we legislate or bring new things forward, you’ve always got to be aware of the unintended consequences.

So I’m sure that my colleague Andrew Griffith, who’s our business secretary, business experience himself, Mel Stride, indeed our shadow chancellor, again, who started a small business that he built up and sold out, will recognise some of the challenges for contractors who are IR35. Now, I can’t make an announcement today that it’s going to say, ‘I’m going solve all this for you’, but certainly it’s something we should look at and we’re trying to ease regulation. You know, we want to, if you ease regulation, all the kind of animal spirits then follow in terms of people starting up, scaling up, that produces taxation, more tax, which is great, as the economy grows, which means you can actually reduce taxation. So red tape, lower taxes, is a good thing, provided you can make it all stack up.

There was a bit of research we did with small business was, there’s always struck me as quite surprising, that out of the UK economy there’s roughly 5.4 to 5.6 million companies, but there’s only 40,000 companies with a turnover of over £5 million, somewhere between 29,000 to 27,000 with a turnover of £10 million.

Do you think we’ve got a small business problem or do you think that we have a problem of getting to the medium size enterprise?

Kevin: Well, you’ve always got problems in all those areas, but one thing we should recognise, you know, if you don’t know what a unicorn is, it’s a business that starts from scratch and gets to a billion-dollar market cap.

So, we’ve got more unicorns than France, Germany, and Sweden put together. So, these are businesses that have made that journey successfully. And these are all tech businesses. There are some like Revolut, of course, tech banking.

But also, you’ve got BrewDog, it’s a brewer. You’ve got Castore, which makes these football shirts and cricket shirts and that kind of stuff. You’ve got OakNorth Bank, you’ve got Gymshark. There’s a clothing retailer.

These businesses, Castore and Gymshark literally started on their kitchen table, as did BrewDog. They started in their garage brewing beer. So the sky’s the limit.

We’ve just got to make sure that the journey’s easier. Two things you’ve got to do.

We want more people to become entrepreneurs. Well, my favourite quote is GK Chesterton said, “Too much capitalism isn’t too many capitalists, it’s too few capitalists.” We want lots of capitalists. Lots of people of all ages decide to make that journey to build their own stake in society by starting and building a business, as I did. And it’s transformed my life.

And I want other people to have that opportunity and that aspiration.

To get those businesses, like you say, the high-growth businesses, there’ll always be a community of people, part of the community will not be interested in going there for whatever reason. If you increase the numbers, they’re getting the hopper at the top. If you get more people at the top, there’s going to be more unicorns coming out the bottom. That’s one undeniable part of equation.

And how do you think you do get more people in at the bottom level?
Because with things like business rates, national insurance – if you want to open up a business, it involves you having a small premises and employing some staff. There’s so much fixed rate of tax that it makes it challenging for you to be able to actually fund the initial stages to get to that profitability stage.

Kevin: Well, there are two things to make it easy. It’s never easy. I’m not saying being in business is easy.

You’ve got to be ready for some challenges. You know that. I know that, but we want to make it easier. So we want the reverse of what this government’s doing.

I mean, you want to keep taxes low and you want keep red tape low because those things hit small businesses much harder than big businesses, particularly the red tape. So, you’ve got to ease the burden of red tape for small businesses.

We did a lot of this in terms of making sure that you could take people on and effectively they had no rights to go to an employment tribunal for two years. That’s all been scrapped by this government, of course. We did things like Small Business Rates Relief, where there’s no rates at all on a premises under £12,000 rateable value, and reduced amounts up to £15,000.

When we did things like discounts through Covid, they were primarily targeted at small businesses.

Access to finance or start-up loans. If you’re thinking of starting a small business, you shouldn’t forget you are three times more likely to start a business if your parents are in business. And mine was – my dad was a milkman. So there’s, and there’s two, probably two reasons.

It’s cultural so they encourage you to give it a go, give you some advice, but also because they’re small business they’ve probably generated a bit of cash that they’re willing to lend you to get you started.

While we’re in government, we think the things that helped to grow, which is that advice stage, and we did like a mini MBA free online, you can still go to it today. So, you get some advice on the first steps. But also, crucially, the access to finance. Startup Loans Company, where it’s a loan that you can get that doesn’t need collateral.

You can get up to £25,000 per partner. So if there’s two of us starting a business, we can get it up to £50,000, subject to business plan. And we’ve lent a billion quid on that. We’ve helped about 100,000 businesses.

So that solves some of those problems. So those are the kind of things we’ve done to make it easier.

So, if you’re starting out in business, the people you typically would go and ask are your friends and your family. But one of the great initiatives and tax reliefs we have is the EIS Enterprise Investment Scheme, where it makes it tax, there’s a tax safety net for people investing in early-stage businesses.

Do you think it’s a mistake that you’re not able to get that tax relief if you’re a connected person, so your family members don’t get the relief, whereas they would do if they invest in a stranger’s business?

Kevin: Yes, I do. And I get the potential unintended consequence of that is that there’s a way then to move your money around so you get the tax benefit without actually taking the arm’s length risk of convincing a new investor.

So, I declare my interest as a business owner.

I’ve attracted investment through EIS and SEIS. And again, I’ve invested in other businesses through the same vehicle. It’s a hugely important tax break. It really reduces the liability.

It shares the liability with the state, effectively. If that business doesn’t succeed and many of those don’t, so it’s high-risk stuff, but it’s a great scheme and businesses that are really ambitious, those business people who really want to go next stage and don’t want to borrow a lot of money, it’s the best way to do it because you can get some investment and some advice at the same time because those people are probably entrepreneurs.

When you’re investing in an EIS or something like that, what do you look at for the companies that you invest in? What gets you excited as an investor?

Kevin: Well, I’ve made mistakes, so I don’t always get it right. Let’s be honest about that.

And you know, I have had three pretty successful businesses. I’ve also had one or two that have failed. You know what I mean? That’s the reality of all this.

There’s nothing precise about this, but the most important thing you look at is the person.

And any investor will tell you that. You know, if you are investing in somebody who is… you can see it in their eyes. This person is going to make a success of their business. You know, make sure those people are fully committed to themselves.

It’s not a sideline for them. That’s probably not the ideal thing. But really, it’s about the person. Of course, you got to look at the numbers and the concept and you keep the ties and all that as well, but they’ve really got to be made of the right stuff.

Chris: It’s really interesting, I qualified as an accountant.

And I think a lot of businesses distil down into sort of spreadsheets and process, but actually a lot of the successful businesses talk about the sort of emotion, the creativity and the sort of desire to build something. And that sort of persistence actually plays out more than the big idea.

Kevin: Determination. I mean people talk about business plans a lot. I have never written a business plan, not in starting a business.

Sometimes I’ve had to do one to raise some cash, but not in terms of starting a new business. I started my first business selling women’s dresses in a market stall. You can start a business tomorrow.

People think, you mentioned before the cost of starting the business, the premises, the business rates, the staff. This is the golden age of business in many ways.

You could be selling stuff this afternoon. On eBay or on Amazon, whatever else. You’ve got a market out there of billions of people. So, and where you start isn’t where you finish your business, ever.

So, you can always do this stuff and you learn and failure is part of the process and don’t worry if you fail, start again, learn what you got wrong and put it right next time. So, I think it’s an iterative process and don’t be afraid to fail, you’d be my [advice].

If you were starting again now, what type of business would you set up?

Kevin: Well, when I was first successful in business, it was something I knew something about. So I tried a few businesses. I was very ill-disciplined, typical young guy, and my dad said, “Go and get a job.

You’re just not ready for this yet.” So I did. Estate agency. So I’m an estate agent-turned-politician.

Chris: It’s really interesting, there’s a statistic that I think 53 per cent of unicorn founders didn’t set up in a sector that they had prior experience in.

Kevin: Well, I admire them, because that’s so difficult. It’s a double whammy in terms of the, you know, if you’re looking for both kind of new markets, new customers, new products, new customer at the same time, that’s a pretty risky segment.

But anyway, for me, so I worked as an estate agent for four years, then set up as an estate agent.

So I knew what I was doing. So it would be ideally something I knew about. I mean, I would be very tempted. I look at where the high growth industries were, and that’s the most exciting part of any economy.

Now, that doesn’t say, you know, you have to be in, you know, AI is where all the kind of everything’s going on in AI now, but you’re not going to compete with Google in terms of the billions, trillions they’re investing in it. But there’s some other things like serviced offices, data centres, that kind of stuff. Again, that’s probably quite a meaty investment, but there’s lots of things in the supply chain there. So, I’d try and attach myself to an industry that has got huge growth in the future.

Chris: I think the change with Covid where you can outsource things and you can use international labour and platforms are available to do that as well as the growth in AI means that the importance of building a brand and IP in an authentic audience is much more valuable, the tech is probably less valuable but ultimately it still comes down to the products or service you’re ultimately delivering and that’s artisanship and craftsmanship that I think is there.

Kevin: I’d add one thing to that, actually.

Products, you can have the best products in the world, you can the best service in the world, but if nobody knows about you, nobody’s going to use that product or use that service. So you’ve got to be good at sales. And I built a business through sales. You probably did too, if you had a bit of it.

You know, you’ve got to get there and market your business.

I don’t think you can ever get away from the fact that cold calling is a material part of success. I think if you can’t pick up the phone then you can do it. Very much like canvassing in politics, it’s how many leaflets you delivered and how many people you called. How many doors you knocked on.

How do you apply the lessons you learned from business into political canvassing?

Kevin: Well, I mean, I think there’s some commonalities in terms of, we overcomplicate things in life and there’s only three things that matter to really communicating what you’ve got.

You need a very simple message. A USP, you would call it in business, but it’s a simple message in politics. It’s a choice in people’s minds. So what you got to do, and I can very easily create a choice between the Conservatives and every other party.

You know, we’re both… kind of concerned about people’s security to the borders and streets, but also we do know where we won’t break the bank. But you create a choice in people’s minds, and that’s the same for politics. Then what you’ve got to do is build, get good people. You build a coalition of people around it.

That’s critical. And then you just do all the hard yards. That’s what you’re going to do. There’s no way of getting around that bit.

And I tried that and it doesn’t work. So that’s it. It’s the same in politics as in business.

So what do you reckon the Conservatives’ three words, snappy slogan would be for small businesses? ‘Get bigger quicker’?

Kevin: I think for me it’s ‘stake in society’. You’ve got to say to people we’re a party of aspiration.

Chris: That’s quite a good one, Kevin.

Yeah, I quite like that one.

Kevin: It’s what I’ve always believed. When I started my business, my life was a total mess. Financially it was a real train crash. But I always believed, because my parents told me this, you can make something of your life.

Through hard work, be that starting your business, buying a house, that kind of stuff. And that’s what I did. And people can change their lives.

We want people to have that same thought in their mind that we’re the party of aspiration. We’re optimistic, we’re positive.

This country is not going to hell in a handcart. There’s some basic fundamental things we need to fix that I think we can fix in a parliament. And that is not just immigration. There’s lots of other low-level stuff we need sort out.

But one thing, our message will always be aspiration and optimism because that’s what young people are like and even older people, like me.

And I know this is a day that everyone’s got in their diary, but on the October 5, it’s SME Day here at the Conservative Party Conference. What can people attending expect on the day?

Kevin: It’ll be a great day. I mean I’ve said it myself, it’s a relatively recent thing we’re doing and I’m delighted we’re doing it. I say too often we’ve engaged in big business and thought we’re engaged in my business.

Not, you know, to me that’s not the right set of priorities. It should be small business first. So great speakers, as I mentioned before Debbie Wasco is coming, proven entrepreneur, inspirational speaker, as a really kind of her own three-point kind of, or every just three-points-way you build a business. So she’d be great to listen to.

Lots of other businesspeople there, successful, who are going to be there as well. You can network with Mel Stride, our shadow chancellor, proven businessperson himself. I’ll be there, as well, with many of our shadow ministers. So it’s a networking day, really, of trying to inspire people, and I’m sure they always are inspired, and then a few drinks in the process, as well.

Chris: Oh, that sounds very enjoyable.

Kevin: Definitely will be.

Aside from the commercial pressures of running a small business, some of the biggest challenges owners face are taxes, for instance, business rates.
What kind of tax changes are the party looking at to support small businesses?

Kevin: Well, business rates is probably the clunkiest system of tax in any of the taxes because you get charged it whether you turn it over to money or not. And the thing about it, it raises £30 billion a year, so you can’t just scrap it. Labour said they’re going to scrap it and didn’t scrap it, and they just come up with some tweaks to the system. I think we’ve got to find a more sensible way of taxing and bringing that kind of money in.

The other thing about business rates, well, there’s these cliff edges in it.

Cliff edges are terrible for businesses. VAT threshold would be another one. So, anyway, so what are we going to do? Well, listen, I can’t, again, tell you policy on the hoof.

But one thing we put in place and we’re very protective of is Small Business Rates Relief.

Because for lots of small businesses, that’s critical. That’s the difference between life and death. So you’ve got to make sure those concessions for smaller businesses are still there. I’d love to, I- people can look on Hansard or look on my past record as things I’ve written about how we should reform the business rate system which is not official Conservative policy, but I think there’s a better way of doing it that maybe the shadow chancellor might a later one.

Chris: From my point of view, the business rates seem to be a tax on the high street as a subsidy for online businesses.

And ultimately, we have an administration burden. My dad was a valuation surveyor. I spent the time filling in business rate reclaim forms as my holiday money. I could do one in about 15 minutes.

I used to get paid per form I filled in. But one of the things I always thought was the valuation office is an expensive administrative tool. The data it collects is challenging because it’s constantly moving. The tax on the high street versus the subsidy to online makes it quite compelling to move that to a VAT model where it’s based on success and sale.

Kevin: Well, that’s exactly what I said on Hansard and on the internet.

I mean, the thing is, it’s…

Chris: Sadly, I don’t read Hansard lightly, but.

Kevin: I mean we had 220 offices. You can imagine the work that’s carried out, both by the owner of the premises, a business owner, and the residents of the other side, and the negotiation that goes on. It’s hugely bureaucratic. There’s got to be a better way of doing it that doesn’t include a cliff edge.

So, you know, don’t be wrong. Whenever you change tax, someone’s going to lose out. What Warren Buffett said, “Don’t tax you, don’t tax me, tax that man there behind that tree.” So, I mean, it’s always going to be some, it’s almost controversial changing taxes fundamentally.

Chris: I think what we’ve decided in this Parliament is to tax airports very massively on business rates which is going to make it more of a challenge to get people into the economy.

Kevin: Well, this is exactly right, because what Labour said, and this again, a lesson for us, they said, time and time again, they’re going to abolish business rates. And they really came along and realised, ‘Oh my God, we can’t do that.’ And so now they just tweak the system.

Then they’re saying they’re going to level the playing field between the online giants and high street businesses. They’ve not done either of those things. There’s a slight tweak to people that have very large premises, but there’s lots of retail, normal high street retailers get caught by that too. So, really, you’ve got to think this stuff through, which is what Kemi’s said, she really wants to make sure we think our policy making through in opposition so the policies we present we can deliver upon.

Nowadays, when I first started working, you set up your pension and you paid into your pension and that was sort of sacrosanct in government policy.
We seem to be in a position now where pension policy changes on a fairly regular basis.

If you’re a small business owner setting up, would you set a pension? Would you contribute to it or would you treat the business as your pension?

Kevin: I do the latter, realistically, I’ll be honest with you. I mean, I think as employees, it’s different and we changed the rules on auto-enrolment so more people pay into a pension now than ever before, which is good and people should be saving.

It depends how you see your future. So I saw my future as you do, I think in exactly how you describe, I saw the future pension be my business.

So I build that up, I don’t need to worry about that. Later on, as we got more established, I started to pay into pension again. But I think setting up. You’ve got to go for it.

You’ve got, I mean, you self-focus yourself and every bit of resources into that business, reinvesting, so you can get through those early stages, but then keep reinvested and keep growing. And that’s one thing I think people from the outside of business don’t understand.

How long did it take you to realise that you’d actually built a business that was stable and you felt secure?

Kevin: You never feel secure, but you feel more secure than you did before. So, you’re always thinking, “I’m going to go bust.” But I think, I remember, we started in 1992, the market was shot to pieces. We got through on a wing and a prayer in 1993.

I think middle of 1994, we looked at our bank account and it doesn’t seem like a lot now. We had £100,000 in the bank. Yeah, a real number. I thought, my God.

And it came out of nowhere, you know, either they say that the night is darker just before the dawn – I mean at one point it was just we were just working, working, working on the coal face and suddenly that happened.

It wasn’t like it didn’t seem to be, it didn’t track us between £0 and £100,000 and and I said it didn’t seem like a lot of money now but it was a fortune to us then and then we opened a second office and it went down to zero again and then back again – you know, that kind of thing.

When you were setting up your business and running it, did you spend a lot of time thinking about your competitors or were you just thinking about your customers and your product?

Kevin: Three things, a lot of threes again. So I keep it simple, this is our business plan. We want to win in the marketplace. So yes, we’ve got to talk about competitors all the time.

So we wanted to number one, market share. We looked at our market share all the time and we wanted it to be national business even with one office. Number two, brilliant service to the customer. Fundamental to that and to our own feeling of worth and fulfilment and job satisfaction.

And the third thing was we wanted to have a lot of fun. That was it that was the plan.

And being in politics now, obviously there’s a rise in Reform and that side. Do you think it’s challenging because how do you avoid talking about your competitor if you’re trying to explain where you sit in the market or do you think is very much more about values and what the proposition is?

Kevin: A pig doesn’t get fatter the more frequently you weigh it, so of course we see the threat of Reform. I think they’re a threat not just to our party but to the country because their spending promises are off the scale.

Just look at them, £140 billion. I think Paul Johnson, the economist at the IFS, used to be at the IFS, said they’re selling moonshine and snake oil, you know what I mean, it’s just undeliverable.

So we’ve got to do a better job of communicating why we’re the choice that people need to make. So of course we look at them all the time, especially right now where, you know, there’s no doubt they are capturing the public mood. But you know from your business, as I know from my business, is that the easiest job in the world is to stand on the sidelines and criticise.

Chris: So it’s quite interesting because if you take this sort of housing analogy, it’s almost like you’ve got a house that’s worth £500,000 and you’re going in as the competing estate agency being Reform and saying, your house is worth £750,000, I’ll sell it for you and I’ll do you a better deal.

But actually, you know, that’s not going to happen. But do you think the analogy works?

Kevin: It does. It works exactly like that. It’s a very good analogy.

And this is what we did, because we had that all the time with, I would call, shysters, who would come in and just not be honest with the customer. And then we’d take in evidence. So, all our valuations would be evidence-based square footage, comparables of other properties sold. And some of the customers were conned and didn’t use any of those higher figures or whatever, were charged a lot of money in the process.

But we would be able to demonstrate why we were right. And that’s what we need to be better at.

And how do you do that in a world where you’ve got complex problems that you’ve got to explain complex solutions to?

Kevin: It’s not easy, definitely, but we’ve got to get better at it, in terms of making it easier for people. It’s no that people can’t understand it if you sit down with them, it’s just that people have short attention spans and the social media world is very short attention span. But there’s no doubt, there’s lots of examples around the world of people who have managed to bridge that divide and make sure people understand the choice they’re making.

But we need to we I’ve got to say we we we’re not where we need to be yet in terms of presenting that choice properly, but you’ll find that choice becoming clearer as we go into conference and beyond.

So, a similar part, still continuing to talk about competition. You’re running a competition, find the best pub in Thirsk and Malton. There may be a conflict of interest there. They’re some of our best local businesses and part of the fabric of communities.

How would the Conservative Party improve circumstances for pub and hospitality businesses?

Kevin: Definitely conflict of interest.

As well as being chairman of the Conservative Party, I’ve been the only chairman ever who’s also been the parliamentary Beer Drinker of the Year.

Chris: Oh, really?

Kevin: So, I know about pubs and there’s so much choice in those.

Chris: What’s your favourite pint?

Kevin: Oh, Wadding Gold. Local brewery it is, but you must come up. So, how do you make things easier? We’ve frozen beer duty in the past and things like that have helped the edges, but the hospitality sector needs a sustainable model.

A better business rates system.

The two things that are really damaging hospitality now, and they’ve cost about 90,000 businesses in pubs and restaurants all over now in this country, is the jobs tax, which really hits pubs hardest, and this desperately bad Employment Rights Bill that’s coming down the track, which has put huge burdens on small businesses. Those are the kind of things we need to scrap.

Chris: I spent nine years working as a cocktail barman because I wasn’t good enough to be a waiter, but I fear now it would be incredibly hard to set up a bar or restaurant with the amount of cost you have involved and the need to continually keep turning the tables and…

Kevin: Definitely. What’s your margarita like, was it good?

Chris: I’m very good at margarita. I will do a very good passion fruit margarita as well.

That’s my favourite.

Kevin: It’s not a North Yorkshire thing, that. It’s a standard one, a drink with a bit of chilli in it.

Chris: During Covid I converted my father-in-law to passion fruit margaritas from real ale.

And lastly, do you have a personal favourite small business?

Kevin: There’s a lot in as you can imagine, really brilliant ones. Well, I mentioned the Howardian Gold beer, and there’s a Helmsley brewery, which is a brilliant local brewery doing fantastic. But also in Helmsley, because I live near there, is a beautiful town, is a little cafe called Mannion’s [Mannion & Co].

And again, local business people, I actually, when I did the market stalls, selling women’s dresses, John Mannion, the father of Lucy and Andrew who own it now, he used to stand at the stand of the markets too, so then they changed their business from a fruit and veg shop into a cafe in York and now they’ve opened one in Helmsley as well. It is brilliant, it’s a must go to if you come to Helmsley, which you must do as well!

Chris: Yeah, yeah, very nice. No, I think those are some of my favourite ones. There was actually, there’s a cobbler’s in Llangefni in Wales, where if you get real leather soles done on the bottom of your shoes, it’s about £70 – £80 in London, you can send it to them, they do it for £15, £17.

Kevin: Jesus, that sounds brilliant.

Chris: Yeah, it was actually really good, you know, for me, I’m always surprised and think, how are they doing this?

Kevin: Fantastic.

Well, Malton is Yorkshire’s food capital, and they do food festivals, so there’s so many businesses there. And it shows actually, we’re talking about high streets, how under pressure they are. There is a formula where high streets can work again, and it’s a great mix of hospitality and experience, that kind of stuff. So it’s great to see businesses that thrive in that kind of place.

Chris: It was very interesting.

Someone said to me that the only way for the high street to survive is to focus on things that Amazon doesn’t sell. That’s probably right.

Kevin: Yeah, it’s very true, exactly.

Chris: I’m always amazed by, if you look at the high street local estate agents do really well and you end up thinking well actually should financial services should go back to the high street having gone into the call centres and actually I think that’s where you can get better advice and individual people and I think that side, where you get A-Plan and Coversure, they’ve shown that for the small business community you need to have that relationship with the consumer because most people don’t want education because they just want awareness first because they don’t know what they need to be educated about.

Kevin: Yeah, I mean, the presence is important, is that it works in our business and that experience, but the financial service sector decimated through regulation. So how many mortgage advisors there used to be versus to there, there’s probably a tenth of them.

Chris: No, it’s well, what’s really interesting is the number of brokers, the independent ones, are probably like 1,500 now, but a lot of them are owned by consolidated groups. Underneath there’s 39,000 appointed representatives, 36,000 – 39,000 appointed representatives where you’ve got people who’ve set up financial services, businesses using someone else’s permissions, but they’re actually incubating.

So you have that next generation of people that could grow into it or next size, but they need that sort of relaxation of regulation to be able to fund it.

Kevin: I mean, that’s a two-way regulation. It just snowballs in the cost of it. I mean the FCA and FOS [Financial Ombudsman Service], as you know, is the complaints body. The total cost of those two organisations, just the regulatory cost, £1 billion a year for people, for their budgets.

I bet it’s ten times as much as that in terms of regulation, in terms the in-house compliance of those companies, maybe more.

Chris: Yeah and I remember there was an actuary I worked with who told me the impact of RDR – or the Retail Distribution Review – on financial services wasn’t the change in business model, it was the fact that it suddenly went from a non-vatable to a very vatable service. So you put a 20 per cent tax on the supply and funny enough you’ve seen a reduction in the number of financial advisors and it’s when I first started in financial services. You could get a private banking account with £250,000 or £100,000 and now it’s like £3 million. So you just think the retreat in terms of people getting high quality advice has got smaller and smaller.

Kevin: Well, Kemi said this a couple of weeks ago in her big speech on welfare, you know, she said you were trying to completely regulate out risk from the market, and you can’t do that.

I mean, there’s no risk or reward. So actually, what you end up with is less choice for consumers, which is bad for consumers. And I mean you financial services, pensions, nobody ever goes out and buys a pension, you’re sold a pension. You’ve got to make sure that relationship still exists and people just want to save.

Chris: Well, yeah, no one wakes up and wants to buy life insurance.

Kevin: Exactly.

Chris: You know, it’s probably the least exciting thing you can buy someone on Valentine’s Day.

Oh, thanks very much, Kevin. That’s been brilliant.

Kevin: Cheers. We really enjoyed the chat.

Chris: No, I enjoyed that. It was interesting.

Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by finopulse.
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