Last month, Number 10 launched a new national initiative in the North West, with Brooks Newmark MP as their representative, hosted by the Peel Policy Forum, a newly established think-tank.
The vibrant city of Manchester was the first stop in the regional tour for Number 10's new investment scheme. Launched at a time when confidence in new small business has never been lower, this scheme offers unique opportunities to support new businesses in the North West. With twelve years of work in private equity, a senior Government Whip and Lord Commissioner of the Treasury, Brooks Newmark MP, met with representatives of the business community in the Manchester region to discuss this scheme and how it can bring prosperity to local business in the area. A spectrum of support gathered together at an event hosted by the Peel Policy Forum (PPF), which is the North West's first and only think-tank.
Announced in the Chancellor's 2011 Autumn Statement and part of the Government's agenda for national growth, this scheme offers generous tax breaks for individuals investing in qualifying companies. Just as young homeowners are currently struggling to get a mortgage, new entrepreneurs struggle to gather the capital to start new ventures. This project offers tax incentives to support these challenged new businesses.
Brooks Newmark MP commented, "I am delighted for Manchester to be the first place in my regional tour to launch this important scheme. I look forward to speaking with local businesses and financial advisors at the Peel Policy Forum to try and gather enthusiasm for this fantastic investment opportunity."
By Matthew Barrett
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Following the release of a report by credit rating agency Moody's, which adjusted Britain's credit rating outlook to negative, several think-tanks and campaign groups have reacted to the news.
The Institute of Economic Affairs' Editorial Director, Philip Booth, said:
"The downgrade threat from Moody’s should come as no surprise. Whilst Moody’s are correct to cite the difficulties in the eurozone as a potential threat to the stability of government finances, many of the problems facing the UK government are home grown. Public spending continues to rise and the Office for Budget Responsibility has shown that there are huge pressures forthcoming from the effects of ageing populations due to increased health, long-term care and pensions costs. Furthermore, the pressures on business coming in the form of increased regulation – including in the vital banking sector – are supressing growth. All these things mean that the UK’s top-notch credit rating is deservedly on a knife-edge."
The Centre for Policy Studies' Head of Economic Research, Ryan Bourne, wrote:
"This intervention by Moody’s is therefore a timely reminder that the Government is doing the bare minimum to address our debt problem. In the upcoming Budget, George Osborne must at the very least indicate that he would be willing to make further spending cuts should circumstances require. Furthermore, he must take opportunities to enhance medium-term growth prospects through the only non-costly, pro-growth policies at his disposal: supply-side reforms. Whether reforming the tax system, deregulating, labour market reforms or policies to improve international competitiveness, the Chancellor must surely see the need to be bold."
Tim Knox is Director of the Centre for Policy Studies which today publishes How to cut Corporation Tax (pdf) by David Martin.
We have heard rather a lot recently about how we must not tolerate “high rewards for failure”. But there is a logical corollary to that particular line: that we should be equally vehement about not imposing high penalties on success. And that is what the tax system does, not just on those individuals who pay higher rate taxes but also on business. For Corporation Tax – a tax on business profits – is effectively a tax that is only paid by successful businesses. It is money taken by the state from highly productive enterprises, money that could otherwise have been reinvested in new ventures. And it is money that is then consumed by the state, notorious for its low level of productivity.
In this way, the state penalises the only organisations which can get us out of the hole that we are in. For growth will only come from business: the state and the consumer are both far too indebted. That is why, as leading tax expert David Martin argues in his Centre for Policy Studies paper published today, George Osborne should announce in his March Budget an immediate cut in the main rate of Corporation Tax from its current level of 26% to 20%. At the same time, he could also announce his intention to reduce it even further – to 15% or even 10% once the appropriate anti-avoidance measures are in place.
Such a move would have numerous benefits:
By Matthew Barrett
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Pasted below are some reactions to the GDP growth figures announced this morning. Updated at bottom.
Prof Philip Booth, Editorial Director at the Institute of Economic Affairs, said:
“It is not surprising that the latest economic growth figures are grim given the headwinds from the Eurozone. However, this should not tempt the government to change track on deficit reduction. There is no evidence that increasing government borrowing will increase economic growth. Indeed, if anything, part of the setback in growth has been caused by the necessary reversal of the irresponsible government borrowing in the immediate post-crash period. Whilst the government cannot solve the Eurozone crisis, it can radically deregulate the UK economy to create the best possible conditions for economic growth. The government must press ahead with planning reform and begin to deregulate the British labour market. In this area, the government has been moving in precisely the wrong direction and it must change course.”
Tony Dolphin, Senior Economist and Associate Director for Economic Policy at the Institute for Public Policy Research, wrote on LeftFootForward:
"In the short term, as I have been warning for some time, things are unlikely to get much better.There is some good news: energy firms are bringing down their charges and petrol prices have fallen. This will ease the squeeze on households’ spending power. But, as the IMF warned only yesterday, when it revised its forecast for growth in the euro zone in 2012 down from +1.1 per cent to -0.5 per cent, the euro zone crisis is an increasing threat to the global economy. Meanwhile, the government is sticking stubbornly to its deficit reduction plans, meaning further cuts in public sector jobs and taking more demand out of the economy. With public sector austerity at home and a potential crisis in the euro zone on their doorstep, it seems unlikely the private sector will step up its recruitment or investment plans any time soon. Together, these GDP figures and the short term outlook suggest the UK economy has slipped back into recession. The feared ‘double-dip’ began in the final quarter of 2011."
The Institute of Directors has this morning published an important report on how growth can be boosted without costing the Exchequer a penny. Measures include:
Miles Templeman, Director-General of the IoD, commented:
“The Government wants to maximise the opportunities for economic growth but it has little or no money with which to do it. Today we have identified two dozen growth boosting measures that will cost taxpayers little or nothing. By adopting these measures, the Government’s growth strategy would be enhanced immediately. We urge ministers to seize this opportunity. The Government’s deficit reduction strategy is central to improving growth prospects and the overall business environment, but the Government also needs to reform the supply-side of the economy to boost the private sector. Many of the measures we have proposed today are long overdue and would improve the UK’s infrastructure and the functioning of its labour market.”
PS Via Google the following headlines can be found describing the IoD report:
Guess which one came from the BBC? Yep, the most negative one. Headline number four. The BBC continues to struggle to understand enterprise.
> The IoD's Graeme Leach is one of the participants in next week's ConservativeIntelligence Going for Growth Conference. Other speakers include David Gauke MP, Iain Martin (WSJE), Mark Littlewood (IEA), John Redwood MP, David Willetts MP and Nadhim Zahawi MP.
The report recommends three main courses of action:
Without action, warn the authors, the UK deficit is likely to more than double from the 2009 rate of 2% of GDP to almost 5% in 2020.
Click here for a PDF of the full report.
Author: Brooks Newmark MP
Publication date: 19 October 2009
Brooks Newmark MP argues that the true state of the nation's finances is far worse than the Government's official figures and that the actual size of public sector Net Debt is £2,220billion rather than the £825billion stated by the Government. He claims the reason for this discrepancy is the failure of the Government to factor in debts caused by PFI projects, unfunded public sector pension liabilities, contingent liabilities such as Network Rail and the state intervention arising from the banking crisis. The report suggests it is time for an independent audit of the Government's books.
Author: Miles Saltiel
Publication date: September 2009
In the September 2009 edition of "Prospect" magazine Lord Turner, chairman of the FSA, proposed a "Tobin tax" which is a tax on financial transactions. The author argues that such a tax would be damaging for the British economy.
Authors: Corin Taylor, Ben Farugia, John O'Connell, Mike Denham and Matthew Sinclair
Publication date: September 2009
This report contains a list of 32 specific suggestions for saving £50billion - £42.5billion of annual savings from 2010-2011 onwards and a further £7.5billion of annual savings which are to be considered in an emergency. The rationale and costing of each saving is listed in the report which has been compiled jointly between The Taxpayers' Alliance and The Institute of Directors.
Authors: John Willman, Martin Smith and Natalie Evans (Editor)
Publication date: 21 September 2009
The report works from the presumption that as the growth of the financial services sector of the UK economy has stalled, for the UK to recover it is necessary for there to be a revival of the country's manufacturing base. The report contains a list of recommendations to make Britain the right environment for manufacturing to flourish including changes to taxation rules on capital expenditure, strengthening Enterprise Capital Funds and the Small Business Research Initiative, and cutting back on unnecessary Government regulation.