SUSSEX Enterprise is urging George Osborne to deliver a Budget for business, which allows firms to drive growth, invest and create jobs. It believes 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. As these investments are delivered they will turn into far more tax from profit and the new jobs created.
Scrap the upcoming business rate rise
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, Sussex Enterprise 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.
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.
Incentivise employers to take on young people
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.
In addition, Sussex Enterprise 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.
Commenting on the upcoming Budget, Mark Froud, Chief Executive of Sussex Enterprise, said: “Sussex businesses need an environment in which they can thrive, create jobs, and export our goods and services abroad. George Osborne has to pull out all the stops to boost business by providing them with a Budget for growth.
“The Chancellor must stick to Plan A, but scrap the 5.6% business rate rise that will cripple many businesses. Firms must be incentivised to invest through a capital allowances scheme, and encouraged to take on young people. Business also wants to see reforms to employment law and the planning system significantly speeded up. Regulations must be slashed, and access to finance improved. Action in these areas is needed urgently, to help support an economic recovery.