The British Chambers of Commerce (BCC) is today (Monday) urging George Osborne to deliver a Budget for business, which allows firms to drive growth, invest and create jobs.
This view is echoed by IRIS Exchequer customers. Some 30 per cent of businesses think that reducing administrative burdens would encourage them to grow, while more than a quarter (27 per cent), feel that tax breaks would provide the best incentive for expansion, revealed from our recent study of 150 companies on the IRIS Exchequer Roadshow surveying our accounting software customers.
A further 30 per cent say the uncertain economic climate will continue to be the greatest challenge for businesses in 2012, followed by operational costs (23 per cent) and staying competitive (18 per cent), with 12 per cent feeling that customer retention would be a challenge for them in the next 12 months.
If business is to prosper then George Osborne has to pull out all the stops to create an environment in which they can thrive, create jobs, and export our goods and services abroad
Just days ahead of its Annual Conference, however the BCC believes the Chancellor should stick to Plan A, but use the wiggle room he has within the current spending envelope to bring forward substantive changes that will stave off stagnation and weak growth.
The BCC suggests that there is sufficient latitude within the fiscal rules to implement three specific initiatives to support business growth, at a maximum cost to the Exchequer of £4.2bn.
Scrap the upcoming business rate rise which is anathema to growth
· In April 2012, the 5.6% up-rating of business rates will severely aggravate already uncertain business cashflow and impose hefty new costs without offering any real improvement in business conditions.
· In addition, the BCC is calling for the restoration of the Empty Property Rate Relief (EPRR) to £18,000. The current threshold for EPRR creates perverse business incentives, deterring investment.
Cost: £2.2bn Introduce a time-limited £1bn capital allowance scheme for medium-sized companies
· A ‘when its gone, it’s gone’ capital allowance scheme would provide an incentive to firms who have put large investment projects on hold
· Providing a two-year window for medium-sized companies to make crucial investments would create a real incentive for businesses to take advantage of the opportunity.
Cost: £1bn Incentivise employers to take on young people
· The BCC is calling for the Chancellor to double the amount of money available for employer wage subsidies and funded placements under the new Youth Contract (from £1bn to £2bn), or consider changes to employer National Insurance Contributions for young people.
· This would provide a cost-effective way to prevent the alienation of young people, and assist businesses with the development of the skills base required to drive future growth. Furthermore, the BCC records its continued commitment to work with the government to investigate new ways to fund business start-up for young people.
Cost: £1bn In addition, the BCC is recommending the following low-cost or no cost changes to the business environment to allow companies to grow, export and take on staff.
· Implement an effective credit easing programme, and consider the creation of a fully-fledged SME bank, which would be backed by the state at first and later returned to the private sector. This would go a long way to improving the follow of credit to viable businesses.
· A speeded-up National Infrastructure Plan and delivery of the mechanisms promised in the Autumn Statement to increase private investment in infrastructure projects.
· An aviation strategy that delivers both capacity for the South East and growth opportunities for Britain’s regional airports.
· Delivery of radical reforms to the planning system in the National Planning Policy Framework to help businesses expand, invest and grow.
· Help for SMEs trading internationally, through improved access to mentored outbound missions, smarter use of inbound missions and greater financial support for promotional activity and tradeshow attendance.
· Real de-regulation that makes a difference to businesses on the ground. This should include the reform of dismissal rules, such as relaxing the collective redundancy rules and introducing a new no-fault dismissal route.
Without concerted action in these areas, the potential for businesses to grow will be limited, and so will the economic recovery.
Tags: Budget 2012, BritishChambers of Commerce, George Osborne, IRIS Excheque, accounting software, business
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