I was pleased to hear yesterday through the media that the budget will include measures to boost a private sector recovery at the same time as taking action to control the public deficit. As I have been arguing, the country needs hope and budget control needs the prospects of many more private sector jobs. Curbing the deficit means transferring people from the public sector payroll – be they on benefits or in non jobs – to the private sector.
So what measures can and will they take to boost the private sector? The likely measures include:
1. Cutting employer’s National Insurance, the tax on jobs.
2. Putting tapers and Indexation into Lib Dem plans for higher CGT.
3. Cutting the overall level of Corporation Tax to 25%.
4. Cutting the small companies tax rate.
5. Exempting NI on the first ten jobs created by small business.
6. Sweeping away some of the regulations and set up costs on new business.
7. Encouraging new groups and individuals to set up schools
If they want to send out a strong and positive message that the UK is re-opening for business after the deep recession they could also:
1. Set a CGT rate of 10% for gains over 4 years
2. Say Corporation Tax is coming down to 20% over the life of this Parliament
3. Announce a return to 40% top Income Tax rate for 2012
4. State small business profits tax will not go above 20% this Parliament
5. Announce a plan to cut business regulatory costs by £20 billion through the Great Repeal Bill
6. Offer areas of public sector work to private sector franchise/state employee buy out
7. Announce asset sales programme from public sector
8. Split up some government contracts to allow smaller businesses to compete
9.State that banks now have enough cash and capital, allowing them to lend more to the private sector
10.Amend the tax rules on private sector pension contributions so more pension funds can be saved
11. Boost tax free savings plans for investment in business