Monday , June 17 2024

The True Economic Heroes

A lot has been made by me and others about the incredible economic turnaround of the United Kingdom. It is the fastest growing of all G7 economies, and it is now outperforming my own country of the United States with faster growth, and for the first in 35 years, the UK has higher employment than the United States. It is further proof that supply side economics work and that socialist and quasi-socialist policies, as seen in France and the United States recently, do not. What I like about the budget (besides comparing Ed Miliband to King John and the new pound coin) is the section on putting pensioners in charge of their own finances, a truly free market move. To quote Osborne: “The tax rules around these pensions are a manifestation of a patronising view that pensioners can’t be trusted with their own pension pots. I reject that. People who have worked hard and saved hard all their lives, and done the right thing, should be trusted with their own finances. And that’s precisely what we will now do. Trust the people.”

However, as much I want to laud the government, it is important to remember the true heroes of the economy are entrepreneurs and business people who take risks to create jobs and improve people’s lives. They are the people with the big ideas, the people who drive the market to give people what they want and need. They are the people who take out the loans, who invest the capital, hire the labour, and most importantly, take the risks. Sometimes people forget this, but small and medium sized businesses are the biggest employer of people in the United Kingdom.

Small businesses and entrepreneurs need help though, especially considering that in the modern economy, to quote the Duke of York:  “businesses are becoming more efficient and require fewer employees, so any growth in job opportunities will come from a more entrepreneurial economy.” Luckily, there are organisations available to help give entrepreneurs a leg up to make the UK a world leader into the future. I’ll identify three here, the government, non-profit organizations like the Duke of York’s, and then private companies who can insure small business to make their lives a little easier so they’ll feel freer to take risks. Keep in mind; I’m sure there are many others who can help.

In general, I am of the belief that the best programme government can make for businesses is staying out of their way. Government meddling is probably the biggest impediment to growth, in my opinion, because businesses like consistency. If you know how much tax you have to pay, and you know what your costs are going to be, you can better make a budget for your business. That is why I for instance, argued a simpler tax and budget system in Conservative Home. Nevertheless, in our complex economy with muddled regulations and taxes there were some positives in the budget that can help small businesses in the short term. Examples include 1. An annual 100 per cent tax allowance for investment has been doubled to £500,000, 2. The amount of government credit available to support overseas sales has also been doubled, to £3 billion, and the rate charged on that credit cut 3. The new Business Bank has designed a guarantee scheme to promote greater lending to small and medium sized companies (SMEs) 4. UKTI’s Global Entrepreneur Programme will be extended by £2.4 million over two years, which aims to attract start-ups to the UK. & 5. Seed Enterprise Investment Scheme (SEIS), which offers tax breaks to SME investors, which was launched by the government two years ago, was also granted permanent status during the Budget speech today

The second area where there is help for small business and entrepreneurs are non-profit organizations. One organisation I read about that I found exciting was the Duke of York’s Pitch @Palace campaign. It is good to see that there are those out there, as influential as Prince Andrew, committed to getting people starting businesses and to help young people. His article in the Daily Telegraph gives very useful and informative statistics on how hard it is to make it as entrepreneur and start up business, but also how important they have been to our history and how rewarding being an entrepreneur and small business owner can be, especially for young people.

Lastly, there are those in the private sector, probably the people most willing to help, that can help small businesses succeed. One company I ran across, named Jelf Small Business insures small businesses so that they do not fear falling behind. They seem to know their stuff and they do research for businesses too. Here is one example of a study they did that evaluates different regions’ “startup ecosystems”. Not surprisingly, the South East topped the list followed by London, but the report shows that even in the North East, the bottom region, the situation in the UK is favourable to starting a business. 

If this economic recovery is to last and lead to prosperity, it’s going to need small businesses and entrepreneurs to thrive, not just another London city-banking bubble like what was seen in the last decade. The government, the Duke of York and companies like Jelf are here help when times will be tough. But cheers to the individual, cheers to the risk taker, and cheers to the nation of shopkeepers!  Their success will make the future brighter!   




About Ted Yarbrough

Ted is the co-founder and editor of the Daily Globe. He is a long-time blogger on British politics and has written a thesis on Thatcherism.

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