My View on the Autumn Statement 2013

Date: 9-Apr-2014 Post in: Business , UK Economy By: Raj Dhonota

In his Autumn statement, delivered to Parliament just last week, Chancellor George Osborne insisted that the UK government required a plan where we “don’t pretend we can make things better by writing cheques to ourselves.” He felt justified in saying this because forecasts show the UK’s overall growth has increased but he’s aware too that productivity growth is still falling behind what it once was – and should be. And another thing, business taxes are still far too high while exports too low. In order for the UK economy to improve the following are areas which I think HM Treasury really need to look at:

Overseas Exports

I really question whether the government has put in measures to allow home grown businesses to flourish and increase their export trade – and in so doing, contribute to the country’s economy. I already work with companies who export both products and services and are doing so extremely successfully. However, it’s with no real help from the government to begin with.

Measures to encourage more businesses to become involved in exporting overseas is just what we need – yet they haven’t materialised. A reduced/incentivised tax rate for exporting would have been just the ticket. Another alternative would have been additional funding for businesses who wanted to get involved in exporting. Then again, education programmes on how to go about securing overseas trade wouldn’t have gone amiss either. I believe we can only increase the UK’s growth and boost our jobs market by incentivising home grown business to target overseas markets. Maybe the government could even give incentives to UK businesses here to educate others on how to target overseas markets. There’s a lot that still needs to be done here, I feel.

Unemployment forecast
This is set to fall from 7.6pc this year to 7pc in 2015, then 5.6pc in 2018. It’s good to know the unemployment figures are heading in the right direction but really, let’s not put up the party bunting quite yet. Why? Because what about the under-employed? That’s millions of UK citizens who aren’t earning a high enough wage to live on or whose skills, talents and experience are being woefully exploited because they’re not getting the kind of wage they deserve (how many low-paid or voluntary interns are there in the UK right now, for instance?).

According to George Osborne another 20,000 apprenticeships are to be created. Now this I do applaud. Apprenticeships benefit both small businesses and those taking up the apprenticeship. My only gripe here is – why nothing for the 30-year-old plus group? They need incentives and training too – either to get back into employment or to be encouraged and given the confidence to start up in business on their own. It’s the Forgotten Generation that I keep referring to – the ones who really need the government’s help right now.

Business rates
These are to be capped at 2pc. Then there is £1,000 off for small shops, pubs, cafes and restaurants and a 50 per discount on business rates for those who are willing to take on empty business premises for three years. With regards to the latter, I’m not convinced a 50 per cent cut will really make that much difference when it comes to getting the UK’s high street vibrant again. There needs to be some other solution, such as incentivising landlords with empty shops to let them at a much less expensive rate or, alternatively, penalise them for having empty shop premises.

The start-up loans scheme is to be expanded, and as a result expected to help around 50,000 additional individuals and entrepreneurs. This is great news. This, together with the increase in apprenticeships, will really serve to boost the UK economy.

Debt mountain
Understandably people are getting fed-up hearing about the UK debt mountain. More than that though – they’re angry about having to work into their seventies before being entitled to pick up a pension they’ve worked all their lives for. And in jobs which they feel they’re already being unpaid in. And can you blame them? The young jobless aren’t going to have it easy either – they’re going to lose more benefits as George Osborne seeks to claw back £3 billion over the next three years.

So what’s going to happen? Two things, I predict. Firstly, more people will start up their own businesses in order to regain their self-esteem and to secure themselves a better standard of living than they have right now (the start-up loans and new apprenticeships could certainly make this a reality). Secondly, people will leave the UK and go elsewhere – Turkey is doing well right now and has a very young and healthy future workforce. Germany too is faring fairly well, despite the rest of the EU. Learning a new language really isn’t that difficult you know…

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