We must create an environment for businesses to flourish

Comment by Sean O’Hare on December 22, 2009 at 2:08 pm

How many months into a Conservative Government before it dawns on the Business Secretary that the EU are controlling elements of trade which make it extremely difficult for him to harness the vision?

Comment by Terry Forsey on December 22, 2009 at 2:12 pm

The UK faces one of its biggest tests for years – to be able to generate the wealth necessary to provide the government with the income needed to repay its massive recessionary debt.

This requires businesses of all shapes and sizes to flourish.

Small Medium Business (SMB) employ 13.5 million people contributing over £107,000 per head to the UK GDP. SMBs are the backbone of UK entrepreneurial talent and wealth creation, providing almost 60% of the UK’s private sector employment and one-third of its total employment. They also provide the major part of the UK’s new jobs.

SMBs need to play their part in contributing to future government’s coffers and enable the treasury to manage the debt reduction programme.

In autumn 2009, I published “The Entrepreneur’s Manifesto” which was drawn from working with SMB organisations for over 30 years. The last 8 of which have been as the UK leading Technology Sales and Marketing Coach working exclusively with smaller owner managed technology companies. This is designed to drive the debate to achieve better, more relevant support for SBMs and to unleash the wealth creation potential of entrepreneurs and transform the UK to an incubator of emerging entrepreneurial talent.

This Manifesto is designed to support the debate about how SMB friendly the next government should be. With the need to generate high levels of income, this document proposes pragmatic ways to harness the tremendous potential of SMBs, the backbone of UK entrepreneurial talent, and transform the UK to an incubator of wealth creation.

For more information see – http://www.entrepreneurs-manifesto.com/

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Comment by Lloyd Sewell on December 22, 2009 at 3:24 pm

One of the most important items that needs immediate and urgent attention is the area of (a) intellectual property rights and (b) access to justice.

Both areas of law affect the (c) non-english population much more than it affects the (d) english population.

The reasons are people in group (c) are more likely to try to start their own businesses – for a variety of reasons.

Because you cannot legislate in advance of unknown problems – lack of access to legal representation (in the case of problems relating to your business) – unfairly discriminates against people in group (c) and can result in total ruin – not to mention the total loss of their livelihood and human rights.

If Mr Clark’s recent writings are to be taken as a business friendly concept that will be pursued by the ne (ConAD) I sincerely hope that the new (ConAd) will address this very unfair and immoral situation.

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Comment by michael carroll on December 22, 2009 at 11:10 pm

Its no good harping on about the past. But dont forget Ken the Tories are responsible for some horrendous gaffs. Maggies POLLTAX, ORGREAVE to mention a couple.
You blotted your own copy book for being too pro europe. I always fancied you as a PM. Fair play, you have your convictions and you did’nt sell yourself out. I admire that. But pro european does not cut it with many of us out here. Its draining £40million a day out of the coffers. Thats £40mil we could do with. Charity begins at home.
Europe does not give two figs for our problems but they still keep taking.
As for income tax. I was just about struggling through on £25k a year. I have a modest home. A 13 year old car. Have never had a holiday beyond Devon. In fact have not had a holiday since 1998. I am now on a 3 day week since May 11th 09. I am approaching retirement (3rd Feb 2010) I hope to work on asI cant afford to retire. My pension fund is zilch andI have had to take it out on trivialities. They have taxed me £3444 on £14000. I get taxed to the hilt on my piitence of a wage along with NI contributuions. Where is the incentive to continue legally Mr Clarke? Hence there is a growing black economy out here. Just like the ‘lump’ you all tried to destroy years ago. I think the general trend is trust no politicians, look after number one. I commend this policy to the working classes.

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Comment by Chris Rayner (Eagle Technologies Ltd) on December 23, 2009 at 7:36 pm

Dear conservatives,
I would appreciate your views on this example. Help or hindrance?
I’m all for success, I thrive on it, but when my small company turning over a few million is paying more tax than Google, surely something is wrong!!! If this story is correct, why is this type of tax evasion allowed? It’s not good for the country, as well as our cash (substantial amounts) migrating the UK…. £450million tax bill for one year avoided!!!

Titled: Google Gets Low U.K. Tax Bill Because of Location, Location, Location

Google makes billions in the U.K. but pays takes of under $250,000. See, they can do something other than take in ads.

In real estate, everyone knows that location is the key to value. The same would appear to be true about tax law. In the U.K., apparently it can pay handsomely to choose your headquarters situation with care.

According to the Daily Mail, Google has milked that with a vengeance. By funneling British advertising revenue through its European headquarters in London, the company avoided £450million in tax on £1.6billion it made. Other income resulted in taxes of £141,519. Here’s what Google had to say:

Spokesman Peter Barron said: “Google makes a big investment in the UK, with more than 800 employees, and we make a substantial contribution to local and national taxation. But the fact is that our European headquarters is in Dublin. We comply fully with the tax laws in all the countries in which we operate. It would be wrong to think of Google’s revenues from UK advertisers as solely the result of operations carried out locally.”

And here’s my Brit to American translation of that explanation:

We hired a bunch of people who pay taxes, so what’s your problem? At least somebody is paying something. We’re following your laws, so blame yourself for leaving the loopholes. And our advertising revenue comes from places other than the U.K., so just because we have our offices here and we get all the money we make, don’t be haters of the other countries who are getting even less from us than you are.

As reported on by BNET UK December 2009.

PS (Chris Rayner comments)…. 800 people employed does not offset against £450 million tax avoidance). Anyone else agree?

Comment by Member of the Conservative Party on December 27, 2009 at 11:43 pm

I entirely welcome the great sense that the Rt Hon Ken Clarke QC makes in his blog entry. I grew up and entered the workplace when Ken Clarke was previously in the cabinet. A key difference between then and now is that the government offered us a more entrepeneurial society and, unlike the current incumbent government, it actually delivered on that promise. It created a business culture where hard work, clever business thinking and innovation were actively encouraged and supported. Far from being a class ridden society, as the dinosaurs and fossilised thought processes of the Labour party would have you believe, it espoused the notion of a classless society. The structure of Britain progressed in leaps and bounds as talent was free to flourish and small firms were given opportunities to succeed on an unparalled scale. Whilst Labour has since inherited that structurally efficient economy, it has flittered away our competitive edge and we have started falling down the international league tables. We are now struggling to leave a recession when our competitors have already returned to growth.

The impact on wider society and particularly on those now entering the workplace has been devastating. Young folk should be kept busy and given the belief that no matter what their background they all have a fair chance, through hard work, to develop their careers, improve their lives, and progress in a meritocratic and flourishing economy.

We dont get that from Labour. They are digging up old class prejudices that have no place in the post-modern workplace. They do this to create a diversion in the headlines from the mounting national debts and inefficient red-tape that, if left unchecked, will further paralyse the economy.

We need urgent action to stabilise and then grow the economy. Innovation, global commercial opportunities and the need for a greener and more sustainable economic approach are there to be harnessed by a more entrepeneurial economy (the type of economy Labour can’t deliver).

We dont need all the ill feeling and old arguments about class prejudices.

We need to highlight this as a clear dividing line between our party and Labour.

Comment by Chris Rayner (Eagle Technologies Ltd) on December 29, 2009 at 9:28 pm

Here here to promoting a fair chance through hard work to develop careers….. As a business owner, that basic trait is not easy to come by and extremely expensive to find!!!! Too many think they can earn a Kings ransom and enjoy all the fruits of life by working less and playing more, no wonder our nations personal borrowing is so high, as with defaults. Work hard first, play hard second! A sad fact that the opposite is rife and many I meet echo.

It’s all about promoting POSITIVE ATTITUDE and taking responsibility for ourselves and those we can encourage (lead by example)… something that should (and could) be widely promoted both in and out of the home. It won’t change over night but would provide our nation with a major competitive edge.

I remember (as a Thatcher child) that opportunity was available to those that would grip it with two hands…. However, society today is full of so many rules and a need to sell cheap and at the cost of healthy margins to continually invest and grow a business that staying ahead in business I believe is harder.

Ok, major moves in the IT world are great but IT alone won’t maintain our economic needs and balances. Interesting times these…. Like high street shops closing and being replaced with online shopping and more vans/lorries on our roads. This move will result in major retail (and related) job losses… job shifting for sure and maybe closed shops will provide the extra homes we need for our growing population without eating land we need to farm…. But could we do without the touchy feel? The quick buy because we can’t wait until tomorrow or sit around the home all day waiting for our items to arrive? Wow, imagine being at work and everyone taking personal deliveries everyday, ouch for commerce again and managing costly business interruption! I digress!

20 years ago the world was a lot smaller. Maybe opportunity is wider today, but not every business can sell worldwide, but the larger organisations can, so the large get larger, which is the opposite of entrepreneurialism. Whether we like it or not, the service sector is a major factor in our economy, it’s not all about inventions and IP protection, buying a laptop and working from home whilst earning enough to afford the finer things in life on around a 30 hr working week. Our world today is challenging and I think pro-rata a smaller audience available to work it. Best I stop before I end up writing a novel !!!

I love progress and we’re certainly at a time of change. The recession promotes it and opportunity promoted with it…. But alas, because sudden and sever it comes at the cost of jobs, homes and major debt to service! If only we could control it better! We’d then control the bi-product stress and relationship breakdown a lot better too.

All the best
Chris

Comment by Ian on January 4, 2010 at 9:39 am

Does Mr Clark really know what the UK needs to flourish again??
No!! I work with companies all over the world and I see how they are able to create business by being tough on unemployment and providing an educational system that generates the next flow of inspiration.

1. Get rid of unemployment benefit for anyone not born in the UK – This means that anyone coming to the UK will have to have a job or find a job and so contribute to the country

2. Encourage Venture Capital growth by reducing tax on companies that invest in start ups and support the growth of new ideas

3. Make all businesses work in English only, all employees must speak English even if it is there 2nd language.

4. Increase business connections with countries that have a high level of start ups like USA, Israel, Korea, China, India so that the UK can be part of both sides of the business life cycle.

The most important thing is to recognise that business in England is losing ground because of the loss of identity in the PC world and a lot of companies do not want the pains of working with the English PC rules.

If you are serious MR Clark then make the difficult decisions that will win the business and make jobs, however, be prepared for the PC brigade to dislike you and fight against you.

Comment by iain muir on January 7, 2010 at 3:31 pm

2 proposals to reform UK corporation tax and make Britain an attractive place for business:
1. To boost british businesses and make Britain an attractive place to carry on business, reduce the rate of corporation tax significantly (to say 15% if and when affordable) financed by restricting the tax relief for excessive interest expense. The UK tax system should not encourage excess debt and the UK taxpayer should not subsidise it. The tax relief for net interest expense should be restricted to 50% of taxable profit. This would also ensure foreign owned businesses would pay a fair level of UK tax on UK profits.
2. Limit the UK’s corporate tax system to a territorial system – only profits earned from activities carried out in the UK should be taxable in the UK and only expenses incurred in earning UK taxable profits should be deductible. This would radically improve the attractiveness of the UK as a location for international business with little tax cost as at present little tax is collected on foreign income whilst considerable UK tax relief is given for costs incurred in earning foreign income.
A radical new approach is needed to prevent UK groups with international businesses continuing to leave the UK.
Iain
Iain

Comment by Alpesh Patel on January 7, 2010 at 8:56 pm

We must proactively pull into Britain investment and entrepreneurs and inward investors from fast growth economies like India so they make their EU HQ in the UK as British companies exporting globally whilst we have a competitive advantage over those countries in terms of our ability to be the home of global businesses. Getting British business people to do this is a clever way to do it.

Comment by Ranfurly on January 10, 2010 at 9:14 pm

This country has some fantastic brains and Mandelson recognised this in his very recent speech by wanting to harness them to develop centres of excellence. With Mr Clarke’s superb experience and (excepting the Common Market) his good sense, he should build on Mandelsons vision in a way which brings it to fruition – without applicants for funding facing huge bureaucratic barriers.

Mr Clarke needs to concentrate very hard on making this country far more self sufficient by building a lasting industrial infrastructure. Trade from Financial Services is unlikely to last on the same scale because of the wealth of China, India etc.

Comment by Peter Grafton on March 14, 2010 at 11:15 pm

Labour does not seem to have a realistic grasp on either the way the economy works or the requirements of business in order to prosper both the country and the individual. As a fully qualified electrician, Labours rules have made it illegal for me to do work in my own home, but a :joiner can, a plumber can, but a skilled elecrician cannot It is this sort of irrational behaviour from people who do not understand the economy or business which ruins our prospect of recovery. They are quite happy to meddle in the individuals lives with their social engineering, but here it counts, they are lacking