Nothing like a bit of blue-sky thinking to brighten business prospects. The General Election season is quickly gathering pace. The political parties are engaged in either leading with or misleading about their ultimate post-election intentions and plans.
Business organisations and lobbyists are mulling over the contents of their own manifestos. They face the same dilemma as the politicians, how to handle what could be a double-dip recession at a time when government spending and borrowing is out of control.
Business will be on the receiving end of whatever unpleasant tax or spending medicine is doled out, while the new administration will be looking to the industrial and commercial sectors to deliver the growth the economy so badly needs. Some task.
But it is not too late for business to go on the offensive and take the opportunity for a bit of blue-sky thinking in their wish list to the politicos.
The British Chambers of Commerce has taken a modest stab by suggesting a reversal of last year’s reduction in VAT and increase in National Insurance contributions (NICs).
It wants next year’s increase in NICs abandoned and a one percentage point increase in VAT substituted. In short, shift the tax-raising burden from employers and employees to consumers.
The arithmetic works in favour of business, representing a saving of £5bn against an additional £4.5bn yield from VAT – but as a well-known jingle points out, every little helps.
There is of course an element of special pleading in the Chambers’ submission and arguments for shifting the basis of one particular tax yield. Nonetheless, the suggestion marks a departure from manifesto convention.
Reductions in government spending along with less red tape and tax relief for the small businessman have traditionally been the staple diet in the business submissions around election time to the political parties.
There is scope for variations on the BCC theme. The credit crisis and the flow of so-called initiatives from Government after the banks put up the shutters to help small businesses raise finance was a combination of a knee-jerk reaction and do-goodery.
In the second year – or maybe third for some – of the credit crisis there are lessons to be learned from the failure of some of the schemes and the rules attached to them without producing another complex set of arrangements.
The age of the “big idea” may have been consigned to the “something to forget” in the history books, but perhaps the time is ripe for something more practical like giving small businesses a tax holiday to encourage more investment, start-ups and job creation.
The small business organisations and lobbies might also achieve more if they temporarily, at least, formed a coalition to make a joint submission. There should be strength in numbers.
http://www.workfromhomeinuk.com
http://www.telegraph.co.uk/finance/yourbusiness/
Comments on this entry are closed.