Budget 2013: What the UK economy needs is...
- 14 March 2013
- From the section Business
The UK economy is suffering its longest downturn for generations, and Chancellor George Osborne is under pressure to come up with measures in next week's Budget to help the economy recover.
So what do people who run successful businesses in a range of industries, from brewing to animation, think would help them to grow and to create more jobs?
'Help us to buy British'
James Watt, co-founder of Aberdeen-based beer and bar firm Brewdog:
"British firms like us need an incentive to buy British. Far too many companies are having to look overseas when it comes to purchasing expensive equipment.
"For small and mid-sized businesses with limited access to capital, current VAT regulations usually mean they are better off looking toward Europe when buying equipment.
"Buying in the UK would mean avoiding forking out an extra 20% of the product price, which many emerging businesses simply cannot afford. Even though the VAT is reclaimable, British businesses shouldn't be ponying up thousands extra when it eventually makes no net difference to the Treasury at the end of the day.
"Take, for example when we bought our £110,000 bottling machine in 2007. We bought it from Italy, although we would have preferred to have bought British. If we had done, we would have had to have funded the VAT almost £20,000 for an interim period of close to three months. This was money we simply did not have.
"The government should absolutely prioritise solutions that increase disposable spend for UK businesses and more importantly, solutions that enable that money to be spent within the UK.
"Young and innovative companies are a vital asset to the economy in times like these, so it would be great to actually feel like we are being acknowledged and represented in government. If recent Budget announcements are anything to go by, we shouldn't get our hopes up."
'Give skilled women the chance to set up on their own'
Entrepreneur Priya Lakhani is in the process of setting up her second company:
"The only way that the economy is going to recover is by investing in small and start-up businesses who create work for people who have been made redundant, and for all of those great graduates who are coming out of education with no jobs.
"There has been a huge failure in bank lending in the past few years.
"So if the government can continue to improve the tax relief for investors in start-up businesses, that will be really welcome. We are on the right track, but they could do more.
"The current scheme, SEIS, is really great, but there is a cap on it. You can invest £100,000 in a start-up business. If the government can increase that threshold, investors will be incentivised to invest more.
"I would love to see the chancellor helping mothers seeking to start a small business.
"I am a mother and I pay £3,500 a term for childcare for my two young children. A lot of women who are highly skilled look at that and say, if I can't start up a business and cover the costs of childcare, then what is the point?
"They are people who could set up great businesses, but it doesn't make financial sense for them to do so."
'We need to start building right away'
Andrew McNaughton, chief executive-designate, Balfour Beatty:
"Investing in infrastructure is key to getting the economy moving. The word infrastructure is used a lot, particularly when we talk about the economy and the positive impact it can have.
"But when we say it, it's often easy to forget that what we are actually talking about is the train line and roads that take us to work, the power stations that light our homes and the schools that our children go to. It's central to our lives and, as a result, our economy.
"Recent figures suggest that every pound invested in construction generates two-and-half times the amount in terms of total economic activity. And in comparison with other key sectors, such as manufacturing, infrastructure construction activity creates a higher proportion of jobs.
"The government's infrastructure plan, changes to the planning rules and the way that private investment is managed in public projects, will make a positive difference but will only start to bear fruit in two-to-four years' time.
"What we need to support the economy today is to kick start local community projects like schools. This is key for short-term growth, will help increase local jobs and can get started right away.
"Although there will be a challenge around funding and Vince Cable makes a good point that the government can borrow at very good rates now to support these types of projects, there are surely other options.
"However we do it, we need to get some of these local projects moving as they will bring immediate benefit into the heart of our communities."
Help us to take on apprentices
Ken Anderson is co-founder of Edinburgh-based animation firm Red Kite:
"One of the areas the UK excels in on a global scale is new ideas and creativity. In film, TV, music and literature, we perform incredibly well and punch far above our weight.
"Selling overseas and engaging in the global market is hugely important. Anything that can be done to assist companies in doing that is a very good thing.
"UKTI [the government agency that promotes UK exports] is doing a lot of great work: grants to attend fairs and to network globally are imperative.
"So when we are looking around to make reductions in spending, it shouldn't be in the promotion of us internationally.
"Skills and training is another key area. I don't think we should be trying to change higher education. When it comes to training people we need in our particular businesses, that is our responsibility.
"The opportunity to train people on the job, to provide an apprenticeship or traineeship within the company for a couple of years, if that was supported, that would be fantastic. Just a little extra would go a long way to encourage employers to take on staff.
"The value we would get from providing 50% of a wage could be the difference between having five people on a project or 10. And those additional five employees could go on to create great things, rather than never having had the opportunity."