By Frank McKenna 25 November 2011 at 10:00
The Chancellor issues his pre budget statement next week, and given the way the economy has stalled since the summer it is inevitable that he will be looking to find initiatives that can help to stimulate and get UK PLC moving again.
The crisis in the Euro Zone makes his task all the more difficult, with uncertainty and a lack of confidence the two major barriers to business investment and growth.
While Angela Merkel fiddles and Rome burns, that uncertainty and lack of confidence looks set to continue, but if we accept that the treasury has no money to play with, just what can George Osborne practically do?
For political reasons, we can rule out a change to the top rate of tax. Equally, there is no chance of a review of his spending plans, with politicians from across the party spectrum now reaching the conclusion that a signal to the markets suggesting that the government were not serious about cutting the deficit would see us head towards the Greek tragedy scenario. That is not to say that the cuts have been fairly distributed across the country, but the basis of the coalitions economic plan is the only game in town right now.
For me, Osborne needs to do look at measures that will help the SME market. This is where jobs will be created in the future. He indicated at his party conference here in Manchester in the autumn that he would be looking to establish an ‘access to finance’ fund for small firms. We need to hear the detail.
If exporting is a key component of getting the UK back on track, then he should be offering tax breaks and incentives to our exporters. Funding for apprenticeships has increased, can he do more? He can also announce what he plans to spend on infrastructure projects during this parliament and flesh out the details of the heavily trailed changes to employment law. One other thing he could do is give business owners some comfort in respect of HMRI. Never has there been a time when we have had so many complaints about the aggressive nature of the approach from the revenue.
None of these measures impact on his spending plans. Cash rich or not, the Chancellor still has options.
You can hear the reaction of Frank McKenna and a panel of entrepreneurs to the Chancellor’s Pre Budget statement at the next Downtown Manchester in Business event. CLICK HERE for details