With its sweeping staircases, stained-glass windows and cavernous state rooms, Mansion House is not the sort of place you forget. The lord mayor of London’s official residence, every detail speaks of history, hierarchy and ceremony — a backdrop where commerce mingles with tradition.
It was here, in the heart of the City, that Alex Depledge, a Bradford-born serial entrepreneur, first encountered Rachel Reeves in the spring of 2022. Reeves was nearly a year into her appointment as shadow chancellor and the pair were guests at a formal dinner, where they were very much in the minority.
“There were about three women and 40 men around this massively long table,” recalled Depledge, 44, speaking in the kitchen of her 15th-century home near Woking in Surrey.
The future chancellor appeared to listen intently to some of Depledge’s pointed remarks on the case for pension reform to get much-needed capital into Britain’s most promising young companies. The entrepreneur had previously written a report in 2015 on the topic when she was chair of the Coalition for a Digital Economy (Coadec), a lobby group for the tech start-up community.
“I think I was unusual because I was young, female and northern, and I saw Rachel smile,” said Depledge, who describes herself as “a bit informal and sweary”.
A couple of weeks later, one of Reeves’s closest aides got in touch with Depledge to ask her to put together a white paper on how to make the UK the best place to start and grow a business. “It was so fun and we got loads done,” said Depledge, adding that she enjoyed working with Reeves. “Rachel’s really personable and really funny. She’s got this really deep, guttural laugh.”
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It marked the beginning of a professional relationship that culminated in Depledge being appointed the Treasury’s first entrepreneurship adviser this year.
How to scale up
Her brief for the current role, which will end after the budget on November 26, is focused on high-growth scale-ups. “I spoke to a handful of people who had been inside No 10 and inside government before and asked, ‘What do I need to know?’ The best advice I was given was to really tightly define my scope,” Depledge recalled. “So I did. I said, ‘These are the three things I think we need to deliver in the next budget for scale-ups.’ ”
Taking the position required some thought, as Depledge is chief executive at her second business, Resi, an AI-powered architecture firm with 65 staff. The first person she called was Jules Coleman, her co-founder. “She was like, ‘You’ve got to do it.’ ” The pair had previously started and run Hassle.com, a company providing domestic and commercial cleaning services, which was sold for €32 million in 2015 to Helpling, a German rival.
Depledge said the Resi team and board gave her their blessing, with her No 2, Joe Whitworth, head of technical operations, stepping up to assume some of the day-to-day running of the business.
She was enticed by the opportunity to work more closely with Reeves, who has benefited from the insights of an entrepreneur. “I think Rachel recognised that she didn’t have any business expertise around her, per se, because, let’s be really honest, you don’t expect … business to be pro-Labour. It’s not like the Tories, who can pull on all of these different demigods of business to help them.”
Depledge, who added that she was a swing voter, said: “I’m not loyal to Labour; I’m loyal to Rachel, because I really like her. I think she’s super well-intentioned and she listens.”
Depledge, who is separated from her husband, also has to juggle care for two young daughters and a non-executive board position at Persimmon, the FTSE 100 homebuilder. “I’m working about six and a half days a week at the minute. The way I described it to my kids is that sometimes in life, you just need to knuckle down and get a job done, and then you know you can get [the time] back on the other side. So I’m just heads-down now until the budget.”
Depledge describes herself as “a bit informal and sweary”
VICKI COUCHMAN FOR THE SUNDAY TIMES
Hunt for growth
Reeves faces a significant challenge in balancing the books. With the UK economy flatlining and borrowing costs surging, the government has limited room for manoeuvre without breaching its self-imposed fiscal rules. To add to the chancellor’s woes, the Office for Budget Responsibility is expected to downgrade its growth forecasts.
Some of the UK’s growth could come from Britain’s young companies, which, Depledge argues, already punch above their weight. There are about 34,000 scale-ups in the UK, according to the Treasury, which is equivalent to just 0.6 per cent of all small and medium-sized enterprises (SMEs) — yet they generate £1.4 trillion in turnover, contributing 55 per cent of all SME revenues.
Depledge argues that these businesses could grow even more quickly and create more jobs if they were given the conditions needed to thrive. This requires some focus on key sectors. “The uncomfortable truth is that our economy is out of kilter. We are service sector-based and consumer-based, and that means you’ve got no defensibility when things take a turn for the worse.”
She suggested that “we need to re-orient back to making things and becoming world-leading” in certain sectors: “Life sciences, advanced manufacturing, creative industries, financial services, and that’s before you get to AI and [quantum computing]. These are all things that we have the potential to be really good at.”
Escape the valley of death
While Depledge is reluctant to be drawn on the details prior to November’s budget, she said she is pulling together “a coherent narrative about why you should start, scale and stay in the UK”. A criticism frequently levelled at British technology companies is that they sell too early after being trapped in the “valley of death”, where many promising start-ups, starved of vital investment, can also end up going bust.
“The economics are sometimes difficult to make work in the UK because we don’t have the depth of markets like the US does,” she said. “So we’ve got this valley of death, where people either die in it or they sell too early, or they move to the US.”
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Depledge has first-hand knowledge of the problem. She said she and her co-founder were under pressure from investors to sell Hassle.com when they did because they had been unable to raise follow-on funding. She had also tried to raise a series B funding round for Resi last year. “Could I? I couldn’t raise a freaking stick.”
She has completed a series of meetings around the country with the leaders of growing companies, and they share the same frustrations. “They’ll say, ‘I can’t raise any money. I went out for £35 million; I’ve had to [accept] £10 million.’ Or, ‘We’ve had to delay our fundraising and take debt.’ And these are businesses that are growing out of their skin. The devastating thing was that around half are already [in the process of] moving to the US.
“So this is not a tomorrow problem — it’s a right now problem that we need to solve. We are f***ing good at this stuff, and yet we can’t commercialise it.”
Three solutions
Depledge said her recommendations fall into three areas. The first is around focusing on high-tech, high-growth sectors. The second is around skilled people. “How do we attract new talent and retain the talent that we’ve got to make [the UK] a good place for people to build businesses? Because talent is everything.” And the third is about access to growth capital. She hinted that she supports the Mansion House reforms, which could mean that more pension funds invest in UK growth businesses.
“The big unlock is pensions. Where we used to have 60 per cent of our pensions held in UK equities, it’s now 4 per cent.”
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Depledge admitted there is an “awful lot of pressure on this budget”, but said she was confident that she can propose a package of measures that will make founders “feel loved”.
“We might not get everything right, it might not go as far as everybody wants us to go, but it says to this community: ‘We love you, we respect the risk that you take, and we want to reward it.’ ”
Does she worry about an exodus of British founders to destinations with a more favourable tax regime? “I don’t think there’s a lot I can do if someone wants to move to Dubai and pay zero tax. That’s not a realistic thing for us to do here. We can’t compete on that. So we need to look at the other indices we can compete on.”
This is where “soft power” might come into play, said Depledge, who was last week due to host a Downing Street gathering of British founders who have moved to Silicon Valley. “Even though their money is there, their lives are there now, they still want Britain to succeed. And they’re also coming because they get to go to No 11. There is something about the pomp and pageantry that has a lot of currency.”
The draw of British hospitality at the highest levels of power seems to appeal to presidents as well as tech founders. “Trump’s only coming [to Britain] because he wants to have tea with the King in a castle,” said Depledge. “We need to be better at utilising our soft power.”