Friday, 11 December 2009

Brown’s 'Pre-Budget' Bluster

This week Gordon Brown released the government’s pre-budget report. Despite all the bluff and bluster about bashing bankers, this proved yet another missed opportunity. Brown failed to tackle the debt crisis facing Britain, and failed to support small business in Elmbridge and beyond.

Amidst the detail, there are three key points:
- First, the government is carrying on spending as if Britain was not facing an epic crisis of public debt.
- Second, its answer to the (almost) 5% contraction in the UK economy this year is to punish the entrepreneurs and middle classes – the very engines of economic growth - with a range of tax hikes.
- Third, for small businesses in Elmbridge – and across the country - there is no help with corporation tax, an increase in National Insurance and no let up on business rates.

I have been down on the high streets in East Molesey, Walton and Cobham gauging reaction from local businesses struggling with the recession – and this lacklustre government. I spoke to a range of small businesses, including: estate agents, butchers, glass merchants, a recruitment agency, furniture retailers, a flower shop, arts and crafts sellers, a mum’s play group and a printing business. I visited the Saturday market in Walton. I met with Derek Williamson of the Elmbridge Business partnership, and heard from Alistair Mann and David Worsfold of Cobham Chamber of Commerce (see below).

People raised a whole range of different concerns, but three particular local issues loomed large:
- The high level of business rates set by central government, with precious little received back in return - a real grievance for Molesey butcher, Adrian Strachen (see below), and many others across Elmbridge.
- The impact of parking charges on small business. (Parking charges have been forced on local authorities, because the Treasury has choked Surrey funding for local services.)
- The increase in National Insurance in the pre-budget report, which compounds business costs at precisely the wrong time.

Much of the national media commentary has focused on the overtly political nature of the pre-budget report – increasing taxes on the middle class, as a rallying cry to Labour’s core supporters. One myth should be dispensed with straight away. The well-off in Britain pay more than their fair share of taxes already. Just 1% of the country are paying almost a quarter of all income tax. By opting to increase that burden, rather than exercise public spending restraint, Gordon Brown is yet again attacking the entrepreneurial engine that can get Britain back on track.

In the months ahead, I will be campaigning for measures that can fuel a national recovery, and support local business and families, including:
- Cuts in corporation tax – both the main and small business rates.
- Deferral of VAT payments by small businesses for 6 months, to help ease cash-flow problems.
- A national loan guarantee scheme – because after the billions doled out to the banks, credit is still not reaching those that need it.
- Scrapping stamp duty on the purchase of homes up to £250k – to give first-time buyers a leg up onto the housing ladder.
- Securing for Elmbridge borough council a greater share of the revenue from business rates - so it can promote local business growth, and cut parking charges.

My thanks to all the businesses who took the time to discuss their concerns with me - especially those at Walton market (see below) who let Erika and I sample the goods!


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