Entrepreneur: the lost word in George’s Budget
THOSE who like to take a punt on the Budget were offered a broad selection of bets by bookmaker Sporting Index last week, including the length of speech and how many times George Osborne would take a sip of water. Punters were also invited to place bets on the number of times such words as tax, euro, billion and stamp duty would crop up.
In the event, the Chancellor mentioned tax 119 times. One word conspicuous by its absence from the Budget was “entrepreneur”, while “innovate” also failed to get a mention. “Manufacturing” appeared once and “build” twice.
So much for it being a Budget for business. Shadow Chancellor Ed Balls said: “There was a gaping hole in the Budget where there should have been a plan for jobs and growth.
“The Budget was a huge missed opportunity for business at a time when small firms need a government on their side; the economy is flatlining, unemployment is at a 17-year high and the Government is borrowing £150billion more to pay for this economic failure.”
John Longworth, director general at the British Chambers of Commerce, believes the Chancellor has fluffed an opportunity to boost the “real economy”.
He says: “Never has there been a more important moment for the Government to focus on British business and long-term growth.
“Many small and medium-sized companies will feel the measures overwhelmingly benefit the biggest businesses. Smaller firms will be disappointed George Osborne did not do more to support the real economy.”
Philip Pinnell, 26, is exactly the sort of gogetting entrepreneur the Government wants to do well. He is the founder of Scratch, which makes kits with all the fresh ingredients to make a meal. He has just received £209,000 from new venture capital fund Find Invest Grow, which focuses on smaller loans to the start-up graduate market.
Philip, who has five workers, says the Government could do more for start-ups like his, which typically take two years to get off the ground.
He said: “They have completely missed the point on national insurance holidays for start-ups. I think it only covers the first year or two.
“As a business we were not in the position, and I imagine many others aren’t, to really start employing people in the first two years.
“We spent that time developing the product, initial customers and raising investment. Only after that time are we able to employ people.”
Ed Balls says Mr Osborne should have listened to some of the ideas put forward by the Federation of Small Businesses.
He says: “The almost £1billion of unspent funds from the Chancellor’s failed scheme for new businesses should have been used to give a one-year national insurance holiday to every small firm taking on extra workers and there should have been greater urgency too on bank lending.”
Axing a planned rise in business rates, which has been dubbed a “robbery”, would have done much to boost confidence and unlock investment, according to Mr Longworth.
He said: “The Chancellor could have used the budget to offer real relief to businesses struggling with next month’s 5.6 per cent rise in business rates.
“Action to stop the great business rates robbery would have given many small and medium-sized firms much greater confidence to invest and hire.”
Lord Sugar, the entrepreneur and TV personality who fronts The Apprentice, also favours a cut in business rates. His other suggestions are a cut in VAT, or a one-year’s National Insurance holiday for small businesses taking on extra workers. He said: “These are just a few things that would have immediate impact and genuine help for small businesses. Instead, regretfully, we’ve got hollow promises that we continue to hear.”
Lord Sugar warned: “We won’t get this deficit down unless we have a plan for jobs and growth to get the economy moving. To do that we need to encourage businesses small and large to invest and be daring to kick-start the economy and employ lots of people.”
The economic recovery remains fragile. Growth may have returned during the first quarter of 2012, after a period of contraction in the last three months of 2011, but that is by no means certain to continue if retail sales are poor for this month.
Chief economist at the British Chambers of Commerce, David Kern, says: “Growth will gradually improve from the middle of this year, and improve further in 2013 and 2014. However, more weight should be given to the risks of a setback in the eurozone and to possible distortions that could result from the Diamond Jubilee and the Olympics.”