How would you stimulate the uk economy?

HAMISH_MCTAVISH

Thrugelmir wrote: »

Plenty of venture capital available or business angels. If the idea is that good. Banks aren't the only source.

Sure, some of them end up selling their soul, and a percentage of their company, to the VC crowd.

I'm a contributor on a very modest scale to a small business angel group myself, and we do lend to or invest in companies looking for growth.

But my point is that many of those we advise through the mentoring organisation are established small businesses, with a good profit history, that just can't get funding from banks.

If you're an established baker, or hotelier, or retailer, or specialist tool manufacturer, or any one of a thousand other small businesses, and need to borrow 100K to open a new shop or buy new machinery, expand and create jobs, then in most circumstances VC and BA are not the right channel for you.

There is little point in having banks, especially banks we have bailed out, that don't lend to small businesses.

RandomDan

One thing this country does quite well is software development, with my area being computer game development. Lending for expansion is currently very restricted.

In industries where a physical "thing" (like a nut or a bolt) is produced there are schemes which can help, but because software is not seen as a "thing" it does not fall into this category.

This is a shame as it is an ever-increasing industry and a field in which the UK can and does excell.

vivatifosi

I've picked these three threads as - although they reflect different political views - they hit the nail on the head in terms of the issues facing small business and how to address them and finally drive some growth through the economy.

Thrugelmir wrote: »

Lending doesn't create growth. Productivity does.

After the recent HPI boom there is a fixation with debt creating wealth. It doesn't. Hard work does.

SME's will only borrow if there's a return to be made. Basic financial management. A skill we've sadly lost in the past 15 years. Though keeps me occupied with plenty of trouble shooting to do.

Thrug, if I could thank this 100 times I would. Starting a small business is hard, they are built through productivity, through savvy, through downright hard work. People are quick to dismiss those who get rich from setting up businesses but would never take that risk themselves.

Rochdale_Pioneers wrote: »

The media is full of reports both direct from the SMEs and from their trade bodies of perfectly viable profitable businesses unable to access affordable credit. You mention the word "debt" - you could use the word "investment" instead, for that is what most businesses do - borrow, invest, repay.

I agree with Roch too, I think availability of cash is still an issue, especially for small businesses. I've seen this happen too much and first hand - though not thankfully with my own business - to suggest that there is no longer a problem.

ILW wrote: »

Small businesses are especially hampered by employment legislation. Many micro companies are terrified of taking on employees due to the grief that can be involved if it does not work out.

Exactly, and not just employment legislation. I mentioned this on another thread so apologies for repeating myself, but if only they could decide what the rules for business are and agree not to change them - especially for small businesses. Having a constant raft of measures thrust upon you that you have to stay on top of is not helpful for any small business. Parties on both sides are guilty of this. Give us some stability people!

Rustic_Ron

dori2o wrote: »

Increase the tax rate for anyone earning over £500k to 60%, over £750k to 70% and over £1m to 80%. (you don't need all this money, it's nothing more than a luxury)

Abolish working tax credits and increase the NMW to at least £8.50. (making working more attractive)

Increase the Personal Tax Allowance to £12500 for those below the age of 65, and £15000 for those 65 and over. (reducing administration costs)

Abolish NI and increase the BR of tax to 25% and the 40% rate to 42% to compensation.

Reduce the rate of corporation tax. (to pay for the NMW increase)

Bring in the mansion tax.

Change Stamp duty so the responsibility falls on the seller, not the buyer (it would take into account purchase price/depreciation/modifications etc. This would redress the balance for FTB's and those who are sitting on massive equities due to the boom in house prices.

Restrict the highest salaries of anyone working in the civil service or a state owned organisation. i.e. RBS restrict the highest salary to £250k with no bonus to be of a value more than 25% of the salary per annum.

Bring back basic utilities under state control. Transport, Energy, Petrol.

Reduce fuel duty by 50%. Get the country moving again.

Subsidise rail freight and encourage (subsidise) road freight to travel during the nights.

Free full time education (including before and after school clubs) from birth. Removing the need for extortionate costs to be paid out in tax credits for childcare.

Reduce the retirement age and make it compulsary. As those at the older end retire it opens opportunities for those leaving school/college/university.

Abolish child benefit and include it in the Child Tax Credits payments.

Brilliant suggestion.....Yes the system we have now is too complex....Up the tax threshold and ditch benefits.

abaxas

Simplify the entry to starting a business.

System

I said this on the day the crisis started:

Abolish corporation tax
Reduce all income tax to basic rate
Abolish national insurance contributions

Abolish all state pensions, and all other state benefits
Replace them with a flat rate £100 per week to every UK citizen, regardless of work status, income or savings
Abolish the entire dept of social security, pensions, etc.
Abolish road tax, put tax on fuel.
Abolish DVLA

lostinrates

I just lost a long post, so might make a series of shorter ones.

To those yelling increse tax on high ioncomes...you would in the medium term lose our tax. Dh is at that point where the Effective tax rate is significantly higher that the actual one, and doing the maths last year we mighut already be better off elsewhere. We might even be able to have dh earn overseas and weekend at home here, so becoming takers not givers.

lostinrates

Small business.

In the last year what would have helped me would be if hmrc were as approachable and helpful as defra. What would have helped me more is a dramatic simplification of both. Making the transition to employ is indeed scary and i have dallied significantly becuase of the responsibilty of this. Its a great shame, as i could offer immeadiately flexible part time work and would lioke to be an emplpoyer rather than use an additional contracted self emoyed person, as i feel it would be a better income for someone, with more longterm reliability from me.

lostinrates

Nanny offsets....while much reviled i think this idea has legs. Not just for nannies but for cleaners, gardeners etc. this is flexible local work, whihc is offset against employers taxes would both increase emoyment, and force up the employment standards....you could not both claim and pay cash or avpide employers responsibility.

I would love to have a cleaned, and would, as in my small business, be anle to provide flexible hours that would be parent friendly....why not make this offset able reducing a process in redistributive cycle?


This could even be extended to other uk made products and services. E.g. We have no heating and cannot afford to install outright, so we save. It would make mopre sense for us, and for the economy to have us buy now but only buy a bristish made and installed product. This could be extended to people taking e.g. Oil to carbon neutral renewables.

Because it would all have to go through books to be offsetable there would be no cash in hand for some of these services which i believe to be a significant hidden hampering to the health of the uk economy.

Generali

Generali's Plan to put lead in the pencil of the British economy:

1. Make the tax code much simpler: get rid of tax free savings schemes, halve the rate of VAT and charge it on everything, have a much higher tax free threshold on income and a single (or at most 2) rates of tax above that, tax capital gains as income, review all taxes with revenue of <£x to ensure that they bring in more than they cost to collect, slash tax credits.
2. Get people to pay for the services they use to a larger extent. A visit to the GP should cost £5 or something with the GP able to waive the fee by forgoing £5 of gross income. An overnight stay in hospital should also have a similar charge.
3. Get rid of central Government mandated targets for the NHS, schools, police and all other local Government provided services. Get rid of the Civil Servants that were counting those targets. If local people want targets they can pay for them via local taxes and vote for parties that will introduce them.
4. Scrap business rates, employer NI and stamp duty for a period (e.g. 5 years) in the poorest areas of the UK, paid for by the above.
5. Get rid of conditional fees for suing Government bodies. Make Government employees personally responsible for their actions through criminal law rather than insurance companies responsible via civil law.
6. Make Open University fees for vocational studies (accountancy, law, design etc) repayable by the OU on completion of the degree.
7. Privatise the banks by giving shares to the public. Introduce a law mandating that no bank can be Too Big to Fail by limiting the maximum assets a bank can hold to £x,000,000,000. All banks should be partnerships with unlimited liability.

The chances of the Magnificent Seven as listed above happening are precisely 0.00%. I can't imagine there's more than 1,000 people in the UK that could get through points 1 & 2 in agreement with me!