Business Leader talks to Matt Hancock about cryptocurrency, inflation and being dyslexic
Business Leader recently paid a visit to Matt Hancock MP to get his views on all things business. Best known for his role as Health Secretary during the pandemic, Matt also says he is looking to come back to his roots in business – having previously worked at the Bank of England and seeing first-hand his parents’ experience of the ups and downs of running a company. In the interview, Matt talks about the work he is doing around dyslexia, FinTech and cryptocurrency; and the headwinds hitting the UK economy.
Firstly, for those that may not know you, can you tell us about yourself?
I am the MP for West Suffolk, and most people will know me because of my role as the former Health Secretary. Before politics, I was in business and economics, having played a role in my family’s small business that nearly went bust because of a client not paying their bills. This is what got me interested in business and how it works – how can a good company be affected like this? I have also worked for the Bank of England.
You’re dyslexic and you have been doing a lot of work around this. Could you tell us about this work?
I only discovered I was dyslexic when I got to university, and it was a lightbulb moment because my tutor said to me ‘you can talk the talk, but you can’t write well enough’. I was assessed and diagnosed, and it explained a lot of things to me because I had found English, and all languages actually, very difficult. Now, I want to make sure that people can identify if they are dyslexic quicker and get the support they need because there is no need to feel inadequate or stupid.
Experience shows that somebody that is dyslexic might be an asset to a business though?
That is true because the skills that dyslexic people over-index in are ones that are very important, such as creativity, problem-solving and lateral thinking. This is valuable to businesses, and they are traits found in many entrepreneurs too.
There are organisations that have long been recruiting for these types of skillsets, like GCHQ.
Many successful business leaders didn’t do well at school, but state education has been criticised for not focusing enough on business-focused skills and helping those that are different. Does more need to be done?
There are people who don’t think in the same way as others. They need more support to get a good education because the people who end up as successful business leaders, who haven’t had a good experience at school, are the exception.
For most people, if they don’t get the support they need at school, they don’t end up having good outcomes. The statistics show that around 40% of business owners (that have a company worth over £1m) are dyslexic. But in our prisons, more than half of prisoners are dyslexic. If you compare this to the population, where around 10% of people are dyslexic, it shows it can go both ways for somebody with this condition.
So, do you think the education system is too rigid because the set curriculum doesn’t work for everybody, as we’ve discussed?
You must be careful not to throw the baby out with the bathwater, because having strong English and Maths skills can be the foundation to a successful career. The research also shows that good phonics-based teaching of a language, whether you’re dyslexic or not, is important too.
The issue we have is the failure to identify quicker that some people may need extra support and perhaps we also need more flexibility too. But I’m not one of those people who would like a free-for-all in education. I believe it is important that teachers and the education systems follow the science but are also sensitive to everyone’s strengths and weaknesses.
Then there’s a broader question about teaching business skills, such as teaching financial literacy and communication, to make sure that people are ready for the workplace.
You mentioned your background at the Bank of England. What is your prognosis for the UK economy?
My worry in the short-term is that the labour market is very tight, and inflation is rising faster than it has done for several decades, so the macro-economic short-term picture is a balancing act. In the medium to long-term though, I am very optimistic because if we get these judgements right, and we have recently seen the removal of all Covid restrictions, the prognosis for the UK economy is very good.
How concerned are you about rising inflation?
With inflation running at the highest level it’s been in decades, this is putting a cost-of-living pressure on families.
What you don’t want to do though, is put in place responses that are themselves inflationary, like a loosening of fiscal policy. So, there is a real short-term set of risks around the economy and people’s lives. That’s my biggest worry for businesses and the economy in 2022, but I think the medium to long-term opportunities are there for the taking.
Can more be done to help with the issues businesses have around finding the talent they need?
Yeah, I think it’s important that we make sure that in all learning environments, the work is being done to help people get on in the workplace and ‘skill-up’. This is obvious, but it’s even more important now because the shortages are unbelievable.
What I would add though, is that it’s a better problem for society than the problem of unemployment. I think most people are surprised that we came out of the pandemic with a problem of labour shortage, rather than the problem of unemployment.
You have been talking a lot lately about crypto – why have you been doing that?
The reason that I’ve been speaking out on crypto is because I think it’s incredibly important that as a country, we are open and liberal to innovative new assets. Of course, there’s a need for a regulatory regime (for example, on anti-money laundering) and it’s vital that we put that in place, but we need to do it in a way that encourages investment, encourages growth, and encourages the industry to be based here because it’s going to happen, and our choice is whether we benefit from it happening or not.
It’s too easy for the political debate to be about looking at new innovations and thinking ‘how can we stop that?’ I think it’s very important that we also have voices that are saying ‘let us seize the opportunities of these new innovations’ and make sure that the regulator and government response is to embrace FinTech and crypto, whilst ensuring it is as safe as possible.
Do you think that crypto might democratise investing?
I believe there is a financial inclusion aspect to this, and I want people to be able to access investments that might perform well. And it is the ‘might’ that is important. People can understand risk. We shouldn’t be patronising about their ability to understand it because you should always invest no more than you can afford to, but we shouldn’t say that just because you’re not a high net-worth individual, you can’t invest in high-risk assets.
That’s always been the approach that we’ve taken to publicly-traded equities, but less and less equity as a proportion is publicly traded because we have put more and more regulations and requirements on listing.
I’m glad to see some steps in the right direction in that space; this is about empowering people to have access to investments. It isn’t for me, as a politician, to say what investments you should and shouldn’t be going into. I think that the job of the system and the regulator is to make sure there is an open framework with transparency and that advertising rules are met.
What is your message to investors who will be looking at the UK?
We have a real chance over the next few years to strengthen the ecosystem and to improve and liberate our regulatory structures. We can see others really piling into the UK in terms of investment. When I was first working on policy in this area over a decade ago, the big question was about start-up funding and about companies looking to list accessing the funding they require.
Now, these spaces have increasing amounts of funding available and the scale-up space in the UK is a real success too. This all makes the UK ecosystem much, much stronger than many other countries.
There are unprecedented amounts of capital available to businesses but could this result in a consequence of companies not achieving product market fit and raising for raising’s sake?
Well, having the level of capital available that we do have is a nice problem to have. You need to be cognisant of it, but it is one hundred times better than not having enough capital available. It’s a bit like a skills shortage being better than an unemployment problem. Yes, you’ve got to address the challenges in that space, but I’m not actually sure there’s that much that the government can do about people’s choices of when to exit or raise money.
There are lots of people who say ‘too many people exit too early and exit into American hands’, but all the government can do is ensure there are investment opportunities available and that the market is working effectively. We also need to make life easier to list on public markets, if you want to go down that route here, rather than having to go to another country.