It needs to be easier to set up a business, to work for yourself, to take on your first employee, to find new premises and to expand a larger business. All these barriers to growth need examining and changing if we are to achieve the government’sĀ ambitious target of 2.8% growth from here. Today we need to look at the regulatory framework and the relationship with government.
The government has rightly made clear it has no wish to lower employment standards or weaken health and safety and other essential protections. There remain many opportunities to make life easier for businesses without making it worse for employees or neighbours.
More freeports offer the opportunity to run a business which brings in imported raw materials and components, transforms them into goods and export themĀ without having to pay tariffs and taxes Ā until you sell them onĀ and make a profit. It cuts down the paperwork and promotes lower cost production.
More Enterprise zones allow business to obtain better capital allowances or business rate relief. They could also offer simplified planning and access to cheaper land with permissions.
As the government steps up its funding of science and technology in schools and universities, it should also encourage university/business collaboration and offer contracts which foster business spin off from research. The very successful Oxford and Cambridge clusters of research and business parks can be replicated elsewhere and grown everywhere.
The government will want to improve FE, technical and vocational training and ensure accessibility for all ages and experience levels. Training a better workforce is central to raising productivity which allow higher pay and the fulfilment of more individual ambitions.
January 20, 2020
“The government will want to improve FE, technical and vocational training and ensure accessibility for all ages and experience levels. “
Sounds like a half way to Labours idea of a cradle to grave NES, good, so long as proper funding is in place, remember those in need of vocational training in adult life are often at a career crossroads and can not always self fund necessary (re)training.
FE, technical and vocational training should be the norm, University degree level education should become the exception, for exceptional people. We need to stop, due to political posturing, the devaluation of degree level education, there is no reason nor need for 50% of school levers to attended University -unless it is simply to keep them out of the full time job market for 3 to 7 years…
January 20, 2020
Employment along with H&S laws are needed but they should never become excessive or political, risks can be reduced but never eliminated.
What is more, bad or silly H&S rules tend to create other problems, the HiVis jacket or vest is now so common place in every day life people quite literally look past them and that includes all those ‘little builders’.
More Enterprise zones are useful for B2B but might not be for B2C, needing to travel across or out of town can be a hassle for the customer, and business in some cases. Planning laws need to be rebalanced, whilst important neither the wishes of local NIMBYs nor eco-worriers should be allowed to stall a project on their own.
January 20, 2020
Likely as not the Nimbies already work in the townhall, it is the nstural home of negativity.. put an end to acronyms
January 20, 2020
It’s very difficult to dismiss an employee short of gross misconduct, whereas an employee can walk out whenever they feel like it.
Employment regulations need re balancing.
January 20, 2020
I think the issue Bob is that people who have never employed another person do not realise the pressure and affect on the business of a regularly poor performing employee. Eg. a person that has had all the training, refresher training but still can’t get into work on time, they’re present but not effective, hardly ever complete tasks without frequent supervision, a person who when on holiday you don’t miss at all and don’t have to replace frequently forgets to do tasks that can result in putting others at risk. It takes months and months of informal warning meetings, then formal warning meetings, improvement notices and in all this time you’re having work errors, customers upset etc. getting out of an employment contract is harder than to get out of a bad marriage. It is not easy to dismiss people, it has an emotional effect on the business owner, you don’t employ people to fail or to get some sort of perceived ego power trip – it just doesn’t work that way. You employ people to take over a task from you so that you can move on to developing the business to the next stage and build from there.
When an employee wants to leave a minority will just quit and go on the sick whilst they start their new job and don’t work their minimal notice. Most people are good and want to leave on good terms even if they haven’t enjoyed their job, just as most employers are good and want to end contracts on good terms if the fit hasn’t been right or contracts have changed and been lost or someone is no longer physically capable of performing a job and you have nowhere else to move to.
January 20, 2020
Indeed and many employee know this and abuse this position daily. Children get taught by dire teacher for years but they are almost never fired. Even more dangerous in the NHS and elsewhere. Plus the private sector has its ability to improve efficiently hugely compromised. Not even good for the sound workers who have to carry these people.
January 20, 2020
Talking about raising growth, in the midst of this fiasco of leaving the European Union, would be rather like the Australians starting a popular tree-planting drive during their present troubles, if they were to be so silly.
It is, frankly, laughable.
January 20, 2020
@MiC; Yawn… As for trees in Australia, depends were they are planted, the way some go on (ignorantly) anyone would think the entire landmass of Australia is ablaze -its not…
“It is, frankly, laughable.”
Indeed Martin, your constant negativity is.
January 20, 2020
jerry,
We have seen the reports on BBC news regarding the fires and the large āflame iconsā on the Australian map suggest half of the country is ablaze. The reports that the area burnt is the size of Ireland (probably not including Northern Ireland) are somewhere near accurate, but bear in mind that an outline of the whole of Australia superimposed on Europe, would see it stretching from off the west coast of Ireland to as far east as Moscow and from near the north of Norway to just into Spain in the south-west and to the Turkish border in the south-east. You will therefore gather that the total area of burnt land is, proportionately, not as large as intimated.
Very heavy and widespread rain over the past week has seen many fires extinguished (not every single one, I concede) and significant serious flooding. Situation normal! New tress and everything else growing like crazy in most places.
International travellers welcome – come and see what you are missing with less concern about personal safety than almost anywhere else in the World.
January 21, 2020
Yes, you can take metaphors literally if you like.
January 22, 2020
Was it a fiasco for India to leave her empire or S Africa or Rhodesia or Tanganyika? The UKs problems after leaving the empire they are in will be nothing to what those countries went through & even then none would want to return to the empire they left.
January 20, 2020
Tertiary education needs to be refocused so that those who use it can genuinely benefit from it in their future careers commensurate with the expenditure of time and money involved. John Major-Balls who was entirely self-educated re-badged useful institutions as ersatz universities thereby starting the rot. But not only should the institutions be looked at but also the courses: anything ending in ‘-ology’ should be looked at more closely and anything ending in ‘Science’ or ‘Studies’ probably should be closed immediately. It is noticeable that lecturers in many of these pseudo-academic institutions flit between different disciplines thereby undermining their claims to academic merit.
January 20, 2020
Yes to everything you draw attention to. If it is not within the interpretation of Freeport, include airports and places with an identifiable connection to the sea such as Salford, Gloucester etc. It being impractical for every such starting business to set up in a sea port. In fact why not just designate manufacturing estates as freeport enterprise zones wherever they might be.
In situations where businesses are created from research, offer a government backed free patent advise scheme to protect the research from those unscroupulous nation of the World specialising in their theft. Prosecution could then be government led.
Find a way to take a balanced tax take from the large corporations who use tax bases of convenience or who offload their profits to tax havens through supply purchasing scams. The single owner coffee shop must be able to compete on equal terms financially with the multinationals.
Create tax exemption for start ups with graduated payment as they grow without tipping point steps that discourage growth. Tax on business vehicles is good for neither the business world nor the car industry. Tilt is towards UK manufactured vehicles to deter any Ferrari tendencies. Lets see what your readership come up with.
January 20, 2020
All sound recommendations but I seem to have heard it for ever. H M G sponsored the excellent Investors in People. Where is it? Gone. I was London lead on an excellent bench marking initiative with the D T I. Not a big budget but axed at the drop of an economic downturn hat as the Treasury cut back. Apprenticeships. Many not worth the paper they are written as Ministers want zillions of numbers to quote rather than measurable economic improvement.
I know your background so you will understand but civil servants I met had little understanding of entrepreneurship or its pressures and Ministers spouted scripted platitudes.
Whatever initiatives are bought in and your suggestions are excellent. The three rules of successful business are Management. Management. Management and that experience is significantly lacking amongst many SMEs and larger. To use a driving analogy you donāt drive on your own until you have passed your test because of the risk of a crash. I have seen many businesses crash or come close because of management not having āpassed a testā.
When HMG introduces Entrepreneurship in schools covering all aspects of the business scoreboard rather than visits from Banks etc to their business clubs, I will start to believe that they are serious about an efficient private enterprise economy.
Until then we will continue to rely on property speculators and the rise in house prices plus devaluing the pound to grow the economy..
January 21, 2020
I’m not sure I agree about Entrepreneurship in schools. I volunteered once on a Young Enterprise project. The teacher in charge of the entire project put the emphasis on passing the exam, in my team all of the entrepreneurial hard workers (4 of them) failed that exam because they were concentrating on making the product, selling the product at profit, ensuring customer satisfaction and repeat orders failed and the 4 that concentrated on passing the written exam and did little work passed with merit. The little ‘company’ they formed passed to the regional finals were admired by the large business judges and made money whilst paying wages at the nmw, they sourced the lowest cost components, learnt proper schedules but I would never repeat this experience.
January 20, 2020
Good morning.
We should follow President Trump’s example. Before a new regulation can be created, one must be removed. We must also stop the Civil Service from gold plating other forms of regulations from international bodies. Finally. Government must stop meddling in private companies. No more gender and race quotas. Let the best person get the job. You have messed up the Public Sector with this, please stop trying to do the same with the wealth creators or, as some see, the Geese that lay your golden eggs.
January 20, 2020
The Government used to support a string of Enterprise Agencies, in turn employing Advisers with real business experience to help start up/early stage SMEs. That was handed over the Banks whose staff have a very narrow view of business and are doing it solely in the hope of garnering new business.
However they are free. Sums up HMGs commitment.
January 20, 2020
Nig1 believe it or not they still have Local Enterprise Partnerships (LEP) is a locally-owned partnership between local authorities and businesses ours employs nearly 30 people at a high level. We’ve never spoken to them, I too thought they’d been disbanded when they did away with the local Training and Enterprise Councils, they must be mainly there to help big businesses locally, I wonder if they even have a list of their local SMEs and their e-mails to update them with available money, programs, plans.
Advisers from banks and accountants – but this advice is as you said more focused on themselves and they don’t know sufficient details.
January 20, 2020
Innovation surely is the key to competitiveness and innovation is stifled by regulation.
Seems to me the govt. intends to keep on doing the same old red tape stuff yet expects a different outcome.
And as for all the green nonsense ( which is only a regulation money fest)…how would James Watt have boiled his kettle?
January 20, 2020
Innovation is stifled by most pupils and students only doing easy, waffly subjects, and there being accordingly a lack of people with solid enough intellectual foundations and sufficiently extensive knowledge, upon which to build new concepts in design.
The English class system is at the root of the disgracefully low regard in which engineers are held by the classically-schooled elite etc.
We know who they are, don’t we?
January 20, 2020
Marty you need to educate Andy. ‘Innovation is stifled by most pupils and students only doing easy, waffly subjects’
January 20, 2020
It must also be possible to extract profit from one’s enterprise without punitive tax, otherwise who is going to bother? The current dividend taxation regime is a huge disincentive to enterprise. Please get it reversed.
January 20, 2020
A target 2.8% growth is not very ambitious. We could easily do far better then that. We just need to get the government out of the way and get government expenditure down to a sensible proportion of GDP (what would be a much larger GDP) say 25% rather than pushing nearly 50%. Fire all the people in the state sector who do little of any use and release then to get a real & productive job. Stop funding worthless degrees about 2/3 of them are. Stop the green subsidies and go for cheap reliable on demand energy until the renewables need no subsidies.
Why have enterprise “zones” (and “freeports”) that allow business to obtain better capital allowances or business rate relief and simplified planning just make the whole country have these advantages. Why should only some areas have special advantages?
Employment laws are absurd and need simplifying. Easy hire and fire is far better for all even employees. The real protection is more good availaible jobs if you do not like the one you have. Much of Heath and Safetly Law is very misguided and can even make work places more dangerous, but some is clearly sensible perhaps 20% of it. Much of it creates more parasitic industries without making places safer at all and damages productivity.
The dire state virtual monopolies in healthcare and education needs to be addresses to give real freedom of choice to people. The unfare competition from the BBC and it’s licience tax should go.
January 20, 2020
Then there are all the things which have arisen in the past 20 years which make it more difficult.
IR 35 – why stop people working for themselves? The first customer is the most important in starting up.
NEST – why is an employer involved in theor employees savings schemes
GDPR – sledgehammer to crack a nut for small businesses
Rigid pension rules (why annual allowances to contribute?) Often new business founders won’t contribute for 3-4 years, and are disadvantaged thereby.
Employment legislation – anything more than employee/employer agreement is suspect
Business rates – why hobble a business before it makes any money at all?
Corporation tax on retained profits. Why tax businesses on money which stays as working capital in the business, encouraging borrowing just to pay HMRC?
January 20, 2020
17.5% year on year growth in government debts.
Whatās you plan John for your mess?
January 20, 2020
Get some real competition in banking where misguided regulation is making them absurdly slow, bureaucratic and very expensive. 0.2% for deposits and yet they now even want 40% or even nearly 80% on overdrafts from the large banks – it is pathetic & sick joke. What are the BoE, FCA, the Government and the Competition Authorities playing at?
Cut out the rip of middle man banks if you possibly can.
January 20, 2020
There is plenty of competition even more so with challengers and crowd funding. You need to understand the difference between gross and net profit and the costs associated with unsecured and often non agreed lending. Just parroting the headline rate means nothing.
In any event my chunky non secured OD from HSBC is substantially lower than you keep quoting.
January 20, 2020
Their 40% rate start in mid March! So why has good customers overdraft rates gone from base plus 2.5% a few years back to base plus 39% from March then? This when many of the clients are the same risk profile of rather better? If there is real competition why are good risk charged the same of poor ones? If they are daft enough to use them that is?
I assume you OD is not a personal one as all these are going to be at 40%.
January 20, 2020
On a related issue to economic growth, whilst the UK does need 5G it doesn’t need it so quickly as to throw due diligence out the window, nor endanger long established relationships.
Act in haste, repent at leisure…
January 20, 2020
Why do we need 5G? Please provide advantages over 4G.
Would someone provide the disadvantages? Expense, security, masts on every corner, replace current mobiles etc!
January 20, 2020
People can watch more rubbish videos, porn or sport in higher definition perhaps?
January 20, 2020
LL – – and on many more street corners?
January 21, 2020
@Fred H; & @LL; I suspect some people said that about Telephone boxes too, 100 years ago…
January 21, 2020
jerry – – BUT most people didn’t have home telephones – red boxes were rather useful. If you wish you can look at sport, porn, movies now – under 5G it might get quicker, and in HD – BUT at what cost. So we’ll soon have CCTV, state run cameras and now 5G masts everywhere – plus speed cameras being changed to HADECS or Truvelo. More and more drivers are installing cameras too.
1984 is almost with us.
January 20, 2020
The minimum wage law that makes it illegal for people to work for less than X even if they want to do so – is clearly idiotic. They can, after all, legally do voluntary work for nothing but not work for less than X per hour? Give them freedom and choice. Perhaps they prefer such work to commuting and earning slightly more (before the commuting costs and time but perhaps not after) for example. It is matter between them and the employer to agree terms.
January 20, 2020
Back to the age old Race To The Bottom.
That never helped in the past, why should it now?
January 20, 2020
As a property speculator/developer I guess your experience of this is limited/non existent.
I have worked a lot in West London and believe you me entry level jobs, especially the cleaning industry, clothing sweat shops and potentially, hospitality, done mostly by people with limited/no transferable skills, possibly limited English where their leverage is close to zero, need all the support in terms of a legal minimum wage and representation, they can get. I guess this will be replicated elsewhere.
Enlightened employers will invest in their people to maximise output. Too many see them merely as a costly commodity.
January 20, 2020
@LL; The NMW laws are there to protect the employee from the unscrupulous employer unilaterally deciding to pay less per hour, perhaps forcing the employees into to doing unwanted over time to make up the short fall. Also “agreeing terms”, especially when starting a new job, can be a very asymmetrical process -even more so if there are few jobs available.
I’m sure if someone really wants to voluntarily do unpaid work for their employer they will find a way, such as ‘accidentally forgetting’ to clock-in!..
January 20, 2020
Or clock out. Many people do unpaid hours already.
January 20, 2020
No one should be forced to take a job below X per hour but some might choose too perhaps they enjoy the work and it is near to their house etc. The law forbids them from making this choice. It as a law that act against low paid employees and renders many unable to work or learn to work at all.
January 20, 2020
@LL; Trouble there is when someone is desperate for a job, perhaps a scarce job, unscrupulous employers will take advantage -of course the job-seeker will “choose” to take a lower wage if that is the difference between getting the job or not.
January 21, 2020
What is wrong with that? They will at least learn how to work and then be able to get a better paid job a bit later.
January 21, 2020
You refer to “scarce” jobs but if you lower taxes. cut red tape and go for easy hire and fire jobs will not be scarce. The real protection for workers lots of available jobs.
January 21, 2020
@LL; “What is wrong with that?”
Nothing – if you live in the 1800s, but then perhaps you really do wish for a return to the era that Dickens wrote about…
Would you work for say Ā£5 ph Mr Life, would you be happy that one of your adult children signed a legal contract to work for Ā£5 ph, then have to claim housing benefits etc. just to survive independent of their parents?
You say you want lower taxes, how the hell is the Govt ever going to lower taxes if the DWP and local councils are having to hand out in-work benefits like confetti simply because unscrupulous employers woefully under pay their employees.
January 20, 2020
To improve education we first have to get rid of the left and dominated levelling down mentality.
We also need to stop this incessant climate change propaganda I schools.
I remember attending the 1973 Health and Safety at work act introduction in Harrogate way before the EU took over responsibility.
Martin from Brussels of course believes history only started when we joined the EU so won’t believe it.
January 20, 2020
Left dominated……..in schools
Forgot my glasses.
January 20, 2020
It is deeply ironic that on this site a bunch of old men – most of whom have a handful of O levels at best – criticise todayās educational standards, where a degree is pretty much the norm.
You might all have a certain amount of ālife wisdomā which everyone gets through age but on the whole you are far less smart than young people entering the workplace today.
January 20, 2020
Well then. The economy should be supercharged by now, with no need for mass immigration to cover inadequacies.
Funny that we didn’t need mass immigration when people only had O levels (and trades.)
Yes. I left with a handful of O levels (from a tough Sth London comp which produced more borstal graduates than university graduates) but I went on to get a trade, ONC, HNC and chartered status.
January 20, 2020
Ah…’O’ level basic pass that equalled topgrade GCSE.
Abandoned because it demonstrated the gulf in academic ability. Most students in the 50s & 60s didn’t go on to uni because their parents, still reeling from the economic mess of postwar, couldn’t afford it.
YES – WE all have a certain amount of ālife wisdomā unlike you.
January 20, 2020
Yes but most of these degree now are virtually worthless many in worthless subjects too. The median entry A levels is something like two Ds I think. Should anyone with two Ds at A level or lower be going to University at all? They have not even understood the basics of their A levels.
January 20, 2020
The median entry is actually 3D or lower so 50% have this or even less.
January 21, 2020
may I suggest a new term for ‘ a bunch of old men’? – learned wise men’
For certain others try ‘ wet behind the ears’.
January 20, 2020
No, I remember the Aberfan disaster amongst others, and our rivers and coastal waters being grey-brown, stinking open sewers and chemical waste dumps in the 1960s perfectly well, thanks.
Things only improved when the UK was forced, kicking and screaming, to adopt EC/European Union safety and environmental standards.
January 21, 2020
Martin, Aberfan was indeed a horrendous disaster however, there are still ‘disasters’ Grenfell Towers’ for one 72 deaths, Hillsborough 96 deaths, someone passed that cladding for use?
EU Health and Safety didn’t stop cladding being used even when other towers had problems, the cladding must have been passed to be used.
January 21, 2020
No, and the fact that theft is a crime does not stop everyone from stealing.
However, it is better to have laws and some attempt made to enforce them than not.
No, the cladding fitted was not that specified by the designer and approved by Building Control, I read.
January 20, 2020
Schools plus the absurd endless alarmist propaganda from the BBC and that well know narrator of wild life programmes. Never any balance on the topic what so ever. The nearest we got was when Charles Moore was a quest editor and even that was made one sided.
January 20, 2020
Going back to this :
“state debt rules hold the EU in thrall and help keep growth down because they keep taxes up. They do not flex for the Laffer effects of lower rates bringing in more growth and in due course more revenue”
The implication here seems to be that the UK was subject to these (sensible ) fiscal guidelines .In fact the UK negotiated exemption and is currently allowing borrowing to swell far above Maastricht levels.
Even if this were not the case the sentence ” do not flex for the Laffer effects of lower rates bringing in more growth “, has no meaning I can detect. The Laffer curve charts the point at which taxes reduce revenue to the exchequer. It is not an effect and has nothing to do with the hope that reduced taxation might stimulate activity and repay lost revenue over time .
That is just a hope , the UK has been free to bet on it at any time and , as ever , is simply another call for more borrowing , even more borrowing, I should say , at a time when trade especially difficult an the government is busy moving resources form success to failure
Reply UK policy 2009-19 was based on cutting state debt as a percentage of GDP to conform with Maastricht.
January 20, 2020
You need to check your facts before posting. The Maastricht deficit limit is 3%, the U.K. is now at 2% (down from over 10% where Labour left it). Net debt to gdp is c 65%, vs the Maastricht limit of 60% – which has of course been completely ignored in many eurozone countries).
Reply Net debt is not ignored. Each country is giving targets to get the proportion down progressively
January 20, 2020
I was responding to newmania
January 20, 2020
State debt was projected to top out at 80% under Osborne ( which is not 60%) an objective which was itself abandoned post 2016.
Keeping State debt under control should always be an objective but in what sense there has been any particular reference to Maastricht by the UK since 2008 is not obvious to me ?
January 20, 2020
A lot of the trouble small businesses face is recruitment.
People who have been to University are Graduates. They do not make coffee for patients in hospitals! They do not work in shops! They do not wash ladies’ hair in hairdressers! They have a degree!
Also they have the dole.
Also they have a lot of laws which govern their employment and that makes it even harder.
Add to this the safeguarding problems which drive male teachers away from any form of contact with people under the age of 15 and you have a growing number of completely useless graduates.
The factories are staffed by immigrants. The professionals (doctors, nurses, vets, teachers, dentists) are largely made up of families from outside this country too. Just look next time you go to the doctor, the dentist, the hospital: the clerks and receptionists are white British. The professionals and the cleaners probably not.
Education needs a rapid shake up is we are to compete in the world.
PS Homelessness for white boys is very often the result of seriously useless education. They are classed very early on as dyslexic, ADHD whatever and then dumped. Or kicked out – sorry – excluded. Then what? A London railway station?
January 20, 2020
Mike – first rate assessment.
Most of your observations are the elephant in the room.
January 21, 2020
I understand the point you are making Mike but I disagree I know lots of students who work all these jobs you mentioned. Once graduated many young adults I know work in low-skilled jobs whilst they are waiting for graduate placements, in-fact, one young man I know is working as a bar supervisor right now whilst waiting for his graduate placement in the police to start.
Your point about homelessness for white boys is a big problem and I would add a help onto relevant work pathways is missing.
January 20, 2020
Expand businesses, open more businesses – – all this while building millions of houses, taking up yet more land? More houses mean more people who need more roads, more schools, more hospitals. More people create more rubbish. All on an island?
January 20, 2020
More consumption, in other words. Not the same as growth.
HS2 btw. What do we reckon ? A trillion by the time it’s done ? By today’s estimates it’s already costing 4x the first completed railway south to north in relative terms. And by the time it’s built rail could well be redundant.
Just think how this money could rejuvenate the economy if spent on a myriad of regional infrastructure bottlenecks and still have the same Keynsian effect. And HS2 doesn’t even go to the North. It doesn’t even pay for the borrowed votes.
January 21, 2020
But HS2 is built into the Central Plan that has been handed down to us by those that control that giant piece of artifice known as the Global Economy!
January 20, 2020
@bigniel; Try look at Google Earth before sounding off any more about there not being enough space on this green and pleasant island…
January 20, 2020
It isn’t the space. It’s the refusal to build the extra services and roads with these mega housing estates.
And aren’t we supposed be be reducing the country’s carbon footprint ? The People chose to reduce their population via birth control but the politicians threw that into reverse with mass immigration with no mandate whatsoever.
January 20, 2020
@Anonymous; So in your opinion, because the native population has been shrinking, the economy should too? Well yes, that would have been one solution!…
The real problem with the apparent size of some current housing developments is that we have not built enough houses for a number of decades, now we are playing catch-up rather than having built the same number of total units at a more piecemeal rate.
January 20, 2020
What I see here is more of the usual wishful thinking we have become used to- clutching at straws- even if we were to adopt some of these proposals offered it will take years to bring about- you just can’t whistle up this stuff- it has to evolve. In the meantime am afraid we are heading for the doldrums
January 20, 2020
@Frankh; “it will take years to bring about- you just canāt whistle up this stuff- it has to evolve.”
With your attitude God knows how the UK won the Battle of Britain, both the Hurricane and Spitfire would still have been on the drawing board, the RAF still flying biplanes…
January 20, 2020
Open up more sectors of the economy to competition providing more choice to consumers and businesses, and get rid of overbearing regulations.
Apart from education, all other sectors of the UK economy have gone in the wrong direction over the last 25 years. No wonder productivity and growth have ground to a halt.
Open up the economy to disruptive start-ups. Review and improve regulations so they are based on outcomes rather than being prescriptive, enabling the British peopleās ingenuity to solve the problems for you.
January 20, 2020
Do what the UK always does: blow another housing bubble.
When what the population really needs is a change from an Extractive Economy to a Productive Economy.
January 20, 2020
The biggest barrier for most people is finance.
Money is not a problem if you are an Eton-educated son of a rich man. Or if, like some in the Cabinet, your father-in-law is a billionaire. In these cases you (or rather daddy) has the cash – or at the very least- the connections you need to borrow what you like. And if you lose Ā£250k or Ā£1m or more on a business – ah, well, life goes on.
But if you are the daughter of an alcoholic – and if you have grown up on a grotty estate, gone to a sink school and if your family has no assets, no connections and a history of debt – then you aināt getting any money from anyone in the first place. And you have no connections to help.
Most people are neither of these things but are more likely to be like the latter than the former. There are precisely none of the latter in the Cabinet but plenty of the former. They have no idea what it is like.
Enterprise zones, tax breaks and all that are just glorified ways of helping rich people save money. What you really need to do is to help poor people set up business. And that is all about access to finance and having meaningful connections.
Incidentally – this is one of the main problems with Brexit. Itās most vocal advocates – privately educated, multimillionaire posh boys who frankly have little to lose. If they had the guts to put their money where their mouth is the rest of us might have more faith in their project. Strangely none of them do. I wonder why?
January 21, 2020
“The biggest barrier for most people is finance.”
For once I agree with Andy. Enterprise zones, tax breaks, and many business support schemes assume you already have the funds.
If the business support schemes offered things like true hot desks, free computer time, discounted or free accountancy & legal services etc. that would help. They are also only available during working hours – no use for people running side businesses while working full time. In practice, for smaller firms, the most helpful thing most of these schemes could do would be to shut down and hand the money for their costs out as grants.
January 20, 2020
I think it’s important that Laurence Fox is not overlooked for drama roles just because he expressed his honest opinion on Question Time rather than conforming to the politically correct dogma endlessly purveyed by the Ministry of Truth.
January 20, 2020
He should be James Bond
January 20, 2020
Cut back on the supply of cheap imported labour.
Then employers may be forced to invest in training the native population.
January 20, 2020
So we are looking for an equal partnership deal with them but not as rule takers which implies that the EU bloc is instead going to become the rule taker is all a load of old tosh – the latest from the Think Tanks via Javid is all that just pie in the sky stuff hoping that this is going to scare the EU crowd into giving us what we want but is not going to fly- the EU crowd have their homework done and have come prepared. All growth depends on how we manage our affairs this year including negotiations and starting out by making veiled threats is not the way.
January 20, 2020
Most encouraging, though as you are doubtless aware, your words “The very successful Oxford and Cambridge clusters of research and business parks…” likely would not be embraced by AnnaLee Saxenian, author of “Regional Advantage: Culture and Competition in Silicon Valley and Route 128” (1994).
January 20, 2020
Are we really going to go and waste Ā£106bn (it will surely be more in the end) to enable people to travel by train between London and Birmingham 1/4 hour or so quicker than they now can?
January 20, 2020
probably else why delay, delay, delay announcing cancelling the first stage to Brum?
January 20, 2020
I suspect that the Boris government is indeed going to do this. He has already idiotically appointed Carney as some new high priest of the climate alarmist religion. Not cancelling HS2 would be another huge error. You can work on trains anyway so what does travelling slightly more quickly actually matter. Furthermore trains are only fast if they do not stop much. But then you end up with longer connections at each end. So door to door there is rarely any time saving anyway.
Nothing green about a new HS train either quite the reverse.
January 21, 2020
I saw the figures on the news earlier. Ā£106bn to support 9,000 jobs and cut 50 minutes off the journey?
That’s well over Ā£1M a job ($11.7M actually), so wouldn’t it be more cost-effective to invest in steel, respeccing the dockyards to modern standards, provide loans to going concerns, etc. and actually invest in those areas to create jobs long term?
January 21, 2020
I think we have 38m in jobs – but these 9,000 (all British? ) are supported by Ā£106bn – it makes no sense.
January 20, 2020
How about funding vocational training and apprenticeship, making them robust and of real value to industry and students and stop promoting and pushing young adults towards academia and universities
January 20, 2020
+1
January 20, 2020
O/T, for which apologies but some extraordinary occurrences are passing, including the Home Secretary actually accompanying police on an important raid, the Prime Minister accelerating sound immigration changes without awaiting Evil Empire consent and most inspired of all shifting the House of Lords to the north (York is best). Surely we cannot at long last have a government with grip, sense and an earnest desire to do right by the people?
(Clearly, the present āLords chamber can be reallocated for use by the English Parliament. Have you staked a claim yet please?)
January 20, 2020
Great words from Lord (Nigel) Lawson
āI have long argued that in the modern world corporation tax has had its day as a major source of tax revenue. It needs to be a much lesser tax, bolstered by a tax on corporate sales.
While multinationals can artificially shift profits to whatever tax jurisdictions they choose, sales are where they are, and canāt be shifted.ā
The goverment should be seeking his advise
January 20, 2020
That is too straight forward for the modern world political class to understand.
The concept falls down in their minds as it is equal and fair across the whole spectrum of industry and business. Therefor bureaucrats, technocrats and Governments cannot grasp the concept of a tax that doesn’t need further tinkering as they see it working against their personal self importance.
I would ask how much does the present systems cost to administer?
January 21, 2020
Have a look at the digitized, realtime,AI monitored Russian Tax system-it was featured in an article in the FT last year(titled something like Is this the taxman of the future?)-and is proving very effective.
The man responsible for implementing this system has just been appointed Prime Minister in Mr Putin’s reshuffle last week-his ambition is to transform the whole of (domestic) government into a “digital platform.”
January 20, 2020
Well indeed, but this is surely fairly obvious? Also Nigel Lawson is right on the climate alarmism religion too. This obsession of the BBC, schools, universities, some lefty charities, the crony greencrap industry and the fools (or so called “consultants”) in government is doing huge damage and consuming huge sums of money. Money that could be spend thousands of times better than on this carbon “pollution” religion.
January 20, 2020
Isn’t that what VAT is?
Is he effectively proposing double taxation on sales for a certain class of business?
January 20, 2020
VAT an administrators dream. Littered with get outs, pay backs and exceptions. So it becomes unequal,. Pay for a good administrative department and you pay proportionally less.
Sales tax is very small and paid on all sales. Steve Wanamaker (former Apple CEO) using his immense resource calculated it to be less than 2%. The differencing being everyone pays and the revenue raised is actually greater than existing convoluted old world historical set ups
January 20, 2020
Appolgies Steve Wozniak
January 21, 2020
Ian,
Loopholes are what happens when successive Chancellors and HMRC get involved – Just keep things simple less chance to allow clever people to avoid tax…
January 20, 2020
His thinking is to follow the money not the profit nor product i.e remove corporation tax completely and replace it with a flat tax on turnoverā¦.his idea isnāt about increasing taxation but rather having a level playing field and one that will catch every company, which could result in reduced taxes
January 20, 2020
VAT is a consumer tax not a company tax
January 21, 2020
“VAT is a consumer tax not a company tax” – glenn cullen
…but the administration costs of VAT, which are not inconsiderable, are borne by the company.
January 21, 2020
VAT – Value Added Tax as its name suggests is a tax that is added when “value” is added regardless of whether it’s a consumer sale or business to business sale (Output VAT less Input VAT) so not just a consumer tax.
January 21, 2020
Companies are just the collector and administer of VAT…its the consumer that pays the bill
Companies don’t make nor lose any money from VAT apart from the cost of administration (apart from VAT fraud)
January 26, 2020
Well on that basis you can argue that the customers pick up the bill for the corporation tax, business rates and national insurance too.
January 20, 2020
we need new businesses , but there are , like you have previously commented small businesses who are doing quite well and keep their family in new cars and a manageable house . So why should they expand and risk all they have achieved? It is this hurdle which needs to be addressed.The power initiative and motive was killed many years ago as the small businesses tried to take on more. A few succeeded , but not enough . We see Peter Jones et al backing some businesses , but in reality they wouldn’t go into the den if they weren’t struggling and then all their own work is partially swallowed up by the dragons, who are necessary but again business is stream lined into their corporation’s.
January 20, 2020
To paraphrase the corporation tax situation as noted elsewhere
‘When companies dodge taxes, itās not just the government that takes the hit; people, communities and entire regions pay, too. ‘
This bizarre situation is perpetuated by successive governments being fearful of being equal and fair to everyone. For tax as in life KISS ‘keep it simple stupid’
January 20, 2020
This piece was written from a manufacturing perspective – raw materials, import, assemble, sell.
We’re not going to be competitive in the UK versus low labour cost countries for manufacturing (not without some protectionist policies anyway).
The main drive is in “services”. Take IT for example. Nearly every procurement by a medium to large firm goes through some form of tendering process – essentially a contest between interested parties. Yet small companies are not allowed to win…
Every single RFP/ITT boils down to something like a spreadsheet with criteria against which the competitors are scored. Normally the criteria have weightings which multiply the score such that important criteria score higher then less important ones.
On every one of these, when buying software, there is one criterion that is ALWAYS there:
“Ability to support the business”.
Basically, to win you have to be able to support the business you’re selling to and if yo are a small business then you will be trying to provide technical support to a business far larger than your own.
So the management belief is that a smaller business cannot support their business, therefore any submission by a small business is always doomed to fail.
They do not consider the many alternative support models, it is simply a way of keeping the little guy down. Public sector contracts are as bad as any others – the silly initiative to provide a portal for small businesses to tender for govt contracts was.. well, silly. Because they will always run up against that support issue.
And then there’s “too small to sue” issue. Even f you get past support, you are deemed to be too small to provide compensation via legal means if necessary since you’re too small to pay if you lose. Of course, this ignores the fact that not many of the big failures end sup with the failing company paying up – it’s just another excuse to keep the little guy out. Even collaborations between small companies fail for the same reasons.
So the question is… grow into what? A one-man IT business would take on a first employee… to do what, exactly? Given that there’s almost no way to win any tender, you’re dead before you start. And then compare US rules on insolvency to UK rules and… the status quo is preserved ad infinitum.
So I’m afraid you’re asking the wrong questions. Start by reforming the tendering process rules (the requirement for public sector orgs to advertise it in OJEU is laughable, for the above reasons – a small org may know that someone is looking for software, but they also know that they won’t be allowed to win so no-one enters the process).
So you can have the best piece of software in the world, but no-one will ever buy it unless you’re selling apps to individual consumers. Then you look at the cost of developing that software…
Big consultancies like rules like IR35 and two-year expenses rules because it allows them to keep one-man bands as exactly that. Try to stay anywhere long enough to form a real business relationship and… they get you with something.
So many reasons small businesses stay small. Asking the right questions would be a good start.
January 21, 2020
+1 well said
January 20, 2020
All of these steps listed will be ok if they are introduced and carried out on a “level playing field” as far as the EU is concerned- that’s if we want to have a FTA with them?. A Level Playing Field means we cannot diverge too much from present so as to gain trade advantage- and this despite what Javid is saying- so am just thinking the important date is not 31st Jan but 31st Dec and wonder how there is going to be time for Growth in all of this- am also wondering why did we bother