Enterprise tells Osborne how to boost Britain

Super-fast broadband, credit easing, regulatory cutbacks and R&D tax changes to create 30,000 jobs are just some of the items on the business community’s wishlist ahead of the Autumn Statement on November 29^th.

To be unveiled by the chancellor, George Osborne, the statement will offer packages of measures to stimulate the UK’s fragile economy, and will be released alongside fresh forecasts by the Office of Budget Responsibility.

It should contain a ‘bold, affordable and readily available’ initiative for credit easing which, to have the optimum chance of helping the smallest of businesses, must be independent from the banks.

Explaining its wish to Mr Osborne, the Federation of Small Businesses said the “worst deals” on lending – paying the most with the highest chance of refusal, were still being handed to the smallest outfits.

“For credit easing to work it needs to benefit the smallest of businesses as well as medium-sized ones,” the FSB said, reflecting on its submission to the chancellor.

“However, if it is run through the main high street banks, that already dominate the small business market, we fear that businesses will be put off applying for it and so wouldn't have the impact needed to make a difference.”

Group chair John Walker believes that only this type of scheme, not the state’s direct purchasing of corporate bonds in SMEs to create a new lending market – which the Treasury is considering, will help the tiniest of traders.

If those businesses are manufacturers, the most helpful move the chancellor could make would be to cut the burden of taxes and employment regulations, industry body EEF says.

Pointing to his statement later this month, it told Mr Osborne: “The biggest priorities for growth are [around] …making it easier for companies to find the finance and skills they need to grow their business”.

The appeal is likely to please the Forum of Private Business, which says employment law is the single biggest headache for callers to its legal helpline, notably since a raft of new regulations took effect on October 1^st.

But in its recent comments to Mr Osborne, the employers’ organisation the CBI has suggested his focus would be better spent on infrastructure, job-creation and R&D tax reform.

The last two items are related: pointing to PwC research, the CBI said that changing the system of research and development tax credits could prevent jobs being lost overseas (where equivalent incentives are more appealing), while it could also create 30,000 jobs in the UK.

Backed by the EEF and the Society of Motor Manufacturers and Traders, the basic idea is to replace the current R&D system of credits with cash benefits – or a system of credit that can be redeemed when development costs arise.

Yet the chancellor‘s “biggest opportunity” to deliver for the UK economy is with infrastructure, the confederation said, by making specific investments in power generation, road and rail links, housing and super-fast broadband.

Still, what would be best for all business people, regardless of sector, is to have a tax system that rewards them with a lower tax rate if they create job opportunities.

“It is time the government put its money where its mouth is and start to relax tax for entrepreneurs,” said Andy Raynor, of enterprise advisor RSM Tenon, which is petitioning the government to adopt such a low tax regime for job-creators.

“They say that entrepreneurs are the lifeblood of the economy, and yet the level of taxation on them is at its highest for 30 years. SME businesses are an irreplaceable source of stimulus to the UK economy, but there is absolutely no doubt in my mind that the 50% rate is a massive disincentive to growth.”