Tag Archives: Economic Woe

Prisk, fisked.

Mark Prisk MP today wrote an article on ConHome about how the government is intending to ‘help’ small businesses, this it turns out comes after focus grouping on linkedin, and no doubt in other places… but in the words of Ronald Reagan: The nine most terrifying words in the English language are “I’m from the government and I’m here to help.” and it would seem that Mr Prisk’s words haven’t gone down well.

The comments are viscous, and rightly so – the ideas put forward entirely miss the reasons why British businesses despise interference and non-action by Government; time and time again they’re missing the point that what small businesses want is the freedom to expand and grow without being taxed to death in the dangerous first few years of a business.

You can read the whole post here: Mark Prisk MP: How the Coalition Government will help small businesses to thrive and grow – if you are a business owner, please do comment, I think Mr Prisk needs to feel the full force of the feeling that I know almost every small business owner feels on this subject.

We don’t want ‘mentors’ and grants to get the unemployed to start businesses, we want intelligent management of the economy that allows entrepreneurialism to flourish. In a repost of my comments from the article I responded to yet another new plan for ‘help’ by pointing out that it’s a ludicrous situation that small businesses are being taxed to death in their first 5 years to support “saved” banks which then refuse to lend back to small businesses because it’s ‘too risky’ – until that is sorted, the situation for SMEs is not going to get much better. But with wider scope, the whole SME area needs to be looked into: as it is the engine of growth for UK trade and employment and it’s really being strangled I’m afraid.

Let’s look at a few key areas:

  • Business rates are through the roof and councils are pushing harder to make businesses pay for individual services (recycling, rubbish and so on) on top of the rates (set by Government) . Rates in central london can add a third extra to the rent for a small office before you’ve even started thinking about paying for anything else
  • Employer tax contributions are hurting small businesses – taxing small businesses to employ people: that is what the government is doing, and it hurts SMEs when they’re considering taking on new staff. A tax on jobs is a stupid idea and it should be removed forthwith.
  • Tax red tape – HMRC are slow in the extreme, tax questions take months to resolve, bills arrive late (damaging cash flow management) and the new system for PAYE is a mess… Small businesses are wasting hours every month dealing with a confusing and confused system and millions on professional advice that a simpler system would cut through immediately.
  • LTDs of whatever size are being clobbered for corporation tax right from the start – taxes for businesses should be proportionate to size and turnover. Not levied generally across the whole business world.
  • Our banking culture now doesn’t support entrepreneurism – the government can do what it likes but if it doesn’t provide a kick to the banks to stop penalising those who take risks leaving mainstream employment to set up businesses then we’re always going to lag behind: many SME owners I know have the same story to tell – that of previous ventures, (some many many years long gone) being dragged up by banks using privileged information in applications for credit linking ‘LTDs’ to private accounts and ignoring the whole point of limited liability just because they can link your accounts privately within their own systems.
  • Rather than throwing money at the unemployed to start businesses, there should be a pot available to all to support new business
  • There is no useful crisis service for small businesses, unlike big business most SMEs that get into trouble shut the doors or have the doors shut for them by bailiffs using Mediaeval laws of distraint on goods that ignore due process and result in the complete seizure of the flow of cash into the business.

Basically. Help us, Don’t kill us with taxes, and Let us get on our feet before you start trying to rip your pound of flesh from us.

I do hope Mr Prisk returns to his article, reads the comments, considers talking to the contributors and thinks again about ways his government can help the small businesses that keep our economy fluid, bring invention to Britain and keep us as world leaders in many niche fields.

So, spain gets downgraded?

The Greek economic tragedy has finally started to wobble the other more ludicrous economies of this little continent. For years Greece has been one false step away from their economy collapsing in a fiery heap. Entry to the Euro as well as a buoyant world economy saved them from this much earlier; and many pointed fingers at them for fiddling their euro entry details, forgetting their responsibilities as a government to their international commitments, and at their general populous who seem to regard tax avoidance as a national sport, are unionised beyond belief, and in the eyes of many of their European neighbours seem to harbour an almost pathological dislike of a full day’s work.

So it comes as no surprise today that another of our neighbours that for years has taken the whole european community for a ride has finally been downgraded – it’s a comeuppance they’ve had coming for some time in the eyes of many. Spain has personified the scrounger for years: as one pro-euro commentator said earlier:

They’re Europe’s council house, the one we all know where none of the occupants work, but take 2 holidays a year, enjoy their full sky subscription and their booze, fags and nights out. They’ve taken from the community claiming poverty – while spending everything they can get their hands on, not repairing the roof, just splashing the cash.

Harsh words, but frankly not unfair in the broad scheme of things: Spain is a classic example of what needs Anglo-German co-operation to solve within the EU: states that have abused the CAP, European Development Grants and more general European state support services: Spain has had it very easy for the last 15 years, it’s grown fat on a healthy world economy, it’s built roads, schools infrastructure… I could go on. But it’s not modernised, it’s not changed it’s working practices and it’s not attempted to move it’s economy toward self-sufficency – or at the very least some level of debt clearance that’d allow them to sail forward without being mortally holed below the waterline.

Reform is needed right now: the basket case economies of Greece, Portugal, Spain and even Ireland need to make cuts now, they need years of austerity governments, high taxes (that are collected) and no support for fripparies from the stronger economies. The problem is that this isn’t going to happen, what’s going to happen is the larger Eurozone partners plus international aid is going to prop up these basket cases to keep the larger economies afloat: and that’s terrifying.

€120 billion is what the IMF is proposing is needed to stop Greece’s financial flu from devastating other economies big and small: that’s €120b that was only €40b last week: and that Goldman Sachs is predicting could be €150b by next week. It’s no wonder the German’s are taking to the streets to harangue their politicians for answers. We should be doing the same, because no matter how big we perceive the mess in our economy to be, we’re one of the big stable boys in comparison: and we’ll no doubt be asked to chuck money into this pot at some point.