Charlie Elphicke MP: We need a "Get set and grow" scheme for business start-ups

  Charlie Elphicke is the Member of Parliament for Dover and Deal. Follow Charlie on Twitter.

Small businesses form the backbone of the UK’s private sector, accounting for six out of ten jobs. Yet how can we add to their number with more business start-ups?

The Government has been active in promoting new small businesses  – from introducing the New Enterprise Allowance to the start up loan scheme. There has also been a marked increase in start ups and self employment. Since the election, the number of people registered as self employed has increased by 335,000, while the number of start-ups has risen from 29,193 in May 2010 to 47,500 in March 2013.

 

These figures are important because business start-ups matter. OECD studies have shown that business start ups play a powerful role in economic growth. Research also shows a strong relationship between the level of entrepreneurial activity in a country with economic and financial growth.^[1] Start ups are the springboard for growth, and more measures could be taken to encourage their expansion.

The Government has taken some really positive steps, yet there is scope to consider further reforms to encourage more business start ups:

A “get set and grow” scheme

The 'get set and grow' scheme would give business start ups a two year holiday from business burdens. These would include a holiday from corporation tax payments, national insurance contributions and regulatory filings together with a lighter touch employment law regime. This would be available to businesses until they have either been trading for two years, have a turnover greater than £500,000 or employ 10 or more workers.

Charlie Elphicke MP: Labour is responsible for tax avoidance culture

Charlie Elphicke is the Member of Parliament for Dover and Deal. Follow Charlie on Twitter.

Everyone is disgusted by the industrial scale tax avoidance culture of big multinational companies. Last week, Labour Leader Ed Miliband joined the ranks of the concerned, saying of the abuse of our tax system, "As so often under this Government, I think it is evidence of one rule for those at the top and another rule for everyone else."

Except Miliband has a problem. The problem is that the culture of industrial scale tax avoidance grew up under 13 years of Labour Government. Income tax receipts rose 81% while corporation tax receipts hardly rose just 6%. So income tax receipts went from £76.8 billion a year in 1997-98 to £139.3 billion a year in 2009-10. Meanwhile corporation tax (leaving out oil tax levies) went from £28.6 billion a year in 1997-98 to £30.2 billion in 2009-10 – a rise of just 6%.

During this time Ed Miliband was either advising Gordon Brown's Treasury or a Minister in the Labour Government itself. While Labour's Margaret Hodge, now the Chairman of the Public Accounts Committee laying into Google as "doing evil", was also a Minister in that Government. A Labour Government that was asleep at the wheel when it came to tackling tax avoidance by multinationals. They were too busy snuggling up big businesses like these with their prawn cocktail offensive. They failed to keep tax law up to date for the Internet age. The result is a culture that is unethical, unacceptable and irresponsible. This is not a culture that has anything to do with the current Government. It is part of Labour's toxic legacy.

Tackling tax avoidance is something people are seriously concerned about. A recent YouGov poll found that 62% of the public considered (legal) tax avoidance unacceptable. A ComRes poll found that 84% agreed that the Government should crack down on tax avoidance by businesses operating in the UK. Indeed 60% were prepared to call the bluff of every large corporation that threatens to disinvest from the rich UK market saying the Government should crack down on business tax avoidance even if it causes unemployment or some companies to leave the UK.

Charlie Elphicke MP: Smaller businesses are creating jobs and it's right that Osborne backs them

Charlie Elphicke is Conservative MP for Dover and Deal. Follow Charlie on Twitter.

Six out of ten people work for small and medium sized enterprises (SMEs). So the help given to SMEs in Wednesday's Budget was the right approach. SMEs are not just major employers, they are the British economy's job creators too.  Over the last couple of decades employment by large businesses has increased by around 10% - while the SME sector has created jobs at twice that rate.

The graph below shows the SME job growth trend against larger businesses:

Yet SMEs did not really have the support of the Government that they should have had over the past decade. Labour’s National Insurance jobs tax hikes acted to discourage SMEs from taking on new employees which would in turn help their businesses to grow - so the new £2,000 employment allowance is really welcome. SMEs will now be able to take on up to four people on the minimum wage without paying a penny in National Insurance or hire an extra person on £22,400 per annum.

Charlie Elphicke MP: A handful of measures to accelerate recovery

Charlie Elphicke is the Member of Parliament for Dover and Deal. Follow Charlie on Twitter.

When construction falls 3.9% in the second quarter it doesn’t make a lot of sense to talk about building projects that won’t happen for five or more years – things like Heathrow, garden cities and building in the greenbelt. It makes more sense to concentrate on the many existing planning permissions out there for “oven ready” developments that are good to go right now. Grant Shapps has pointed the way on what can be done with his success in bringing forward the development of 22,600 homes in Kent. A development that will provide 60,000 jobs and help get things going in the next year. Meanwhile the Government is looking at guarantees to help fund stalled infrastructure and housing projects. The more we focus on what can be done now, whether through Ministerial activism or (results based) Government guarantees, the more we are likely to accelerate recovery.

But we mustn’t forget the role business can play in accelerating growth. Businesses have £700 billion sitting on their balance sheets. The Office for Budget Responsibility (OBR) had expected a 7.7% increase in business investment this year which has been revised down to 0.7%. Investment in kit like new manufacturing machinery or more modern computers would increase GDP on the one hand and make us more competitive over the longer term on the other. The investment of just 2% of the cash businesses are sitting on (£15 billion) would mean a 1% boost to GDP. The ONS believes weak business investment is due to the continuing Eurozone debt crisis and weak domestic growth. So it’s worth thinking about what steps could be taken to overcome the nervousness business has about investing — like generous time limited investment tax breaks.

Charlie Elphicke MP: Why I'm introducing a British Bill of Rights and Responsibilities

Charlie Elphicke is the Member of Parliament for Dover and Deal.  Follow Charlie on Twitter.

The reform of human rights laws should be a key pledge of a future Conservative Government. We should sweep away Labour's Human Rights Act and replace it with a British Bill of Rights and Responsibilities.

A key element of a British Bill of Rights would be to ensure our freedoms are under the control of the UK Supreme Court and not European judges in Strasbourg. It's wrong for judges in Strasbourg to decide these things. British judges in British Courts should have the final say in line with the laws passed by Parliament. Moreover this is what the British people want, with three out of four people citing the Human Rights Act as a charter for crooks and cheats in a recent You Gov poll.

The fact that the British people feel so strongly is not surprising when you look at what the current European human rights set up does - many feel it creates more problems than it sets out to correct.

All too often under the current human rights laws, it is villains and terrorists who appear to have the upper hand. Remember all that trouble about throwing out Abu Qatada? And the case of Aso Mohammed Ibrahim who knocked down and killed 12-year-old Amy Houston back in 2003, and yet was allowed to remain in the UK as immigration judges ruled that sending him home would breach his right to a ‘private and family life’? We should be able to secure our borders and deport people who commit crimes without delay. Nor should it be so difficult to uphold the principle that criminals should lose certain social rights - including the right to vote in elections.

Charlie Elphicke MP and Priti Patel MP: We need a £50,000 cap on political donations now

Charlie Elphicke is MP for Dover and Deal.  Priti Patel is MP for Witham.  Both are members of the Public Administration Select Committee.

There is nothing more corrosive to public life than the perception that our politics can be bought. All parties have had problems – from the Conservative ex-Treasurer, through the Lib Dem conman donor Michael Brown to the outright purchase of the Labour leadership by the trades unions. Small wonder then that there is such widespread public disgust with the whole business.

There needs to be a limit on donations. Much talked about, yet never implemented. That limit should be £50,000 or less. It should apply to any individual or any organisation – be it a company or trades union. Only with a limit can people have faith that no one person or organisation has the influence to buy our politics or subvert our public life. Moreover, all donor access should be transparent and published so that the public will have more assurance that the system has been changed.

Charlie Elphicke MP: We should target overseas tax dodgers, help the low-paid and only then abolish 50p

Charlie Elphicke is the Member of Parliament for Dover and a member of the Public Administration Select Committee. Follow Charlie on Twitter.

For 13 years, the Labour Government toadied up to the super-rich and turned a blind eye to tax avoidance. As Conservatives we are committed to fairness and social justice. That means we believe everyone should pay a fair share.

Labour walked on by while big companies and people from overseas avoided stamp duty on UK real estate. Action was only taken on non-domiciles when Labour were shamed into action by George Osborne in 2007. Even then they expected us to wait for seven years before expecting non- domiciles to pay a fair share of tax on their worldwide income.

It is not acceptable to wring our hands and say there is nothing we can do.  Other countries manage it. Spain is trenchant on ensuring property taxes are paid.  While the US taxes everyone on the basis of their worldwide income.  They don't sit there worrying about non-domicile status. They just tax everybody, everywhere.

We should learn from these international lessons. Starting with the taxation of UK real estate. Every property owned through a company - be it UK or overseas - worth over £1m should be subject to an annual charge of 0.5% stamp duty land tax. On a sale where stamp duty is charged at the 5% rate the annual duty paid could then be credited against the annual levy.

Charlie Elphicke MP and Robert Halfon MP: Tax cuts for the many, not the few. Let's increase the personal allowance to £10,000.

By Robert Halfon, MP for Harlow, and Charlie Elphicke, MP for Dover.

Tax cutting has to be as much about morality as about economics.  Both are just as important, and neither are mutually exclusive. For Modern Conservatives, the task is clear: Any tax cut must be affordable, help the economy to grow and be justifiable on ethical grounds.

For any tax cut to be credible in times of austerity, it is necessary to show that it can be funded. It must also benefit the many, not the few.  This is why Labour’s plans are the economics of the madhouse. Labour’s VAT cut would focus help on the better off, paid for by more Government borrowing. Only Ed Balls and Labour could dream up tax cuts for the few paid for by higher interest rates for the many.

For Modern Conservatives, tax cutting is in essence a moral creed – allowing people to keep more of their own money so they will have the choice on how, if and when to spend it. Starting with tax cuts for the poorest for who lower taxes would make the greatest difference. Unlike Ed Balls and Labour, Conservative tax cutting must be for the millions rather than millionaires.

So how do we square the circle? How do we help those most in need and boost the economy? Across the board income tax cuts meet the criteria of helping millions but are incredibly expensive.  A basic rate income tax cut of just one pence would cost £3.85bn in 2012-13, so the 3p cut suggested by Ed Balls and Labour would cost a cool £12bn. Not only is it expensive, it is unprogressive, as the rich would benefit most (no wonder the country went bust!). For our part, we see lower taxes for the lower paid is a greater priority than the abolition of the 50p rate.

Charlie Elphicke MP: Children should have a relationship with both parents after a separation

Charlie is Conservative Member of Parliament for Dover and Deal. Follow him on Twitter.

Yesterday, the Government made a big step towards improving child welfare. It is looking to give children the right to know and have a relationship with both their parents following separation. A change in the law is likely to enshrine this right in legislation.

This is a real step forward for all of us who have been making the case for children to know and have a relationship with both their parents following separation.  The Government announcement also amounts to a rejection of the muddled and confused thinking of the recent report of the Family Justice Review - better known as the Norgrove Report.

Norgrove claimed that there was no need to change the law. In particular the report muddled equality of time with a relationship. A relationship is not about a 50/50 sharing of time - it is about knowing and having someone to turn to, someone to talk to who cares about you.

Is a change needed in this area? The numbers are pretty clear - in the UK one million children have no contact with the non-resident parent three years after separation. One million children who could benefit from having the mentorship, guidance and affection that good parenting is all about. A change in the law here will make a massive difference and do much to promote the welfare of children.

Charlie Elphicke MP: We need to reform the banks so they can finance the recovery

Seven Conservative MPs have teamed up with the Centre for Policy Studies and ConHome to propose ideas to turbo charge the UK economy. Yesterday, Jo Johnson set out how Britain should seek new business opportunities in emerging markets.

Charlie Elphicke is the Conservative MP for Dover and Deal.

Equity and debt finance matters to anyone who wants to see more jobs and money. Only with finance can businesses expand, innovate, conquer new markets and take on more people.

Yet the banks are not lending. It would have been far worse without the Merlin agreement. Even so, Bank of England figures show that £7.2bn more funds were recalled from business by banks than lent in the first half of this year.

Charlie Elphicke MP: Turbocharging growth

Charlie Elphicke is MP for Dover.

In May 2010 the coalition Government came to office with the public finances shot through and the country in bleak recession. Public and private debt was unsustainable and economic growth had been built on debt rather than more solid foundations for almost a decade.

The first priority of the Chancellor has, rightly, been to stabilise the public finances. With a credible stabilisation plan now in place, we need to think harder about how we can make Britain grow faster. The deficit reduction plan has maintained Britain's credit rating and kept interest rates low. It has also seen Britain well placed to weather the economic storms now ravaging Europe.  Stabilisation is vital to the now. It is important to ensure our economy is based on true growth rather than debt. Yet we need to move as fast as possible to see a faster economic growth rate for our future generations in a World moving East.

This series of articles looks at measures to help our country grow faster. None of us pretend we have all the answers. We do not look at every area. It is intended as a contribution of ideas to the growth debate. Many of the building blocks are already in place - enterprise zones, labour market reform, regional growth funds and LEPs to name but a few. Others are being put in place - importantly the welfare reforms that will make work pay and encourage more employment. The Coalition deserves credit for its economic activism to date.

Charlie Elphicke MP: Children should have the right to know both their parents

Charlie Elphicke is MP for Dover.

In the UK one million children have no contact with the non-resident parent three years after separation. What should we do about it? According to today's Norgrove Report into family justice, the answer is that we should just stick our heads in the sand and hope it all goes away.

The final report rows back from the interim conclusion that the law should change to enable children to have a “meaningful relationship with both parents.” It says is that it’s all too difficult for judges to deal with the issue of how long children should spend with each parent. This misses the point that judges are already deciding these things. It also amounts to a fundamental failure to understand that a relationship is not about ticking the boxes of time spent – it’s about creating a presumption in favour of knowing and having an emotional bond.

It is well known that parents fight for years to enable their children to be able to have a relationship with them. There are many cases where the acrimony of the parent with residence and the weakness of the judicial system is quick enough to demand money yet denies the ability to have a relationship. This is why I tabled a bill for there should be a duty on all involved to allow children to have access to both their parents. To know and have a relationship with their parents that will serve them better through life. Two role models and two people looking out for you is better than one.

The Government should reject the Norgrove report. A non resident parent is not just a meal ticket - they are a person the child has a right to know and have a relationship with. You only get one go around at childhood - and the best childhood includes the unconditional love and affection of both parents.

Charlie Elphicke MP: Labour would saddle you with £8,000 more debt

Charlie Elphicke is MP for Dover and a member of the Public Administration Select Committee.

Labour like to say the Coalition is going “too far too fast” on cutting the deficit. What they mean is they would like to saddle you with £8,000 more debt than the Coalition. Yesterday, Ed Balls was at it again, denying on Sky’s Murnaghan show that Labour would borrow £100Bn more than the Coalition over the course of this Parliament. In fact, the extra borrowing under Labour’s plans to the end of 2014/15 would be £96Bn.

It may be £100Bn extra borrowing this Parliament. But the numbers are even larger when you look at how much extra borrowing Labour would saddle us all with by the time the structural deficit is eliminated. The Coalition plan is for structural budget balance by the end of 2015/16. Under Labour’s plans, budget balance would not be achieved until the end of 2017/18. The difference in the extra borrowing by the time a balanced budget is achieved? Getting on for £200Bn. That’s equivalent to £8,000 of extra debt per household – a new car or a new kitchen. So when Labour says “too far too fast”, the answer is “no to Labour’s £8,000 debt bombshell”.

Charlie Elphicke MP: We need a Government hotline for small business

Charlie Elphicke is MP for Dover.

Small businesses – SMEs - may be small, but that does not mean they should be overlooked. These businesses may employ less than 250 people, yet SMEs account for half of UK business turnover and 6 out of 10 jobs in the private sector. Moreover, the number of small business jobs has grown by one million over the past decade, while big business jobs have shrunk by a million. The trend over the past decade is that small businesses are the job creators. The message is simple - small business matters to our economy just as much as big business. SMEs should have a voice at the heart of the policy making process every bit as strong as all the big business lobbyists put together.

Government policy needs to be as focussed as possible on helping SMEs to grow. That means looking closely at regulations – are they really necessary or could the effect be to protect larger businesses from healthy competition? What more could the Department for Business could do? It means we should look at small business finance. Unlike big business, SMEs are pretty dependent on banks and must pay far higher interest rates than paid by larger businesses as the Bank of England itself has pointed out. Project Merlin has been a great start, yet is there more that can be done to help SMEs grow and to be on more of a level playing field compared with larger businesses? When it comes to exporting and export credit guarantees, do SMEs have the same level of assistance as larger businesses? There are many more areas to be looked at to help SMEs and I hope that comments below may set out more areas for consideration than is possible in this short piece.

The SME voice may be a hotline, it may be a czar. Call it what you will, it needs to be authoritative and unconflicted by big business interests when speaking for the concerns of half our economy and most of our jobs. Particularly given that big Government will always prefer talking to big business. Such a voice is a necessary bulwark against the risk of corporatism and cosy agreements whose effect, history teaches us, is to the disadvantage of SMEs and detriment of economic growth. It would also help maintain necessary counter balance to ensure that SMEs do not get overlooked if rumours of hotlines being given the larger businesses become a reality.

Charlie Elphicke MP: This was a pro-jobs, pro-business Budget which exceeded its billing

Charlie Elphicke is MP for Dover. Click here to read his preview of the Budget.

With a Budget so packed with help for jobs, money and growth it's hard to know where to start.

Most welcome was the help for low earners. Neglected during the Labour years, we saw real help in this Budget. The shock fuel duty cut and increased personal allowance will make a real difference.

The pro jobs and pro business nature of the Budget was summed up by the stated ambition to have the most competitive tax system in the G20. Corporation tax is to be cut to 26% now and will fall to 23% by 2014. Tax reforms will make the UK much more attractive for corporate headquarters. The patent box will encourage innovation.

For smaller businesses we saw much needed reforms to encourage investment. Simplification of regulation and the possible merger of income tax and NICs will really help too. The block exemption from regulations for micro businesses and start ups was eye catching.

It is to be hoped that the reforms to export help will make a real difference and encourage smaller businesses to export. The enterprise zones announced today will also help create more jobs, while the support for science and innovation was a stride in the direction of getting Britain stronger again.

This Budget exceeded the billing. What is great about it is the less flashy changes that will help Britain grow faster over the longer term. After the discouragement of the Labour years, this was the Budget business needed to know it's OK to invest, create jobs and look to the future with greater confidence.