Budget 2012: We need a long-term focus on job creation
Graham Gordon, partner and head of financial planning and wealth management, at Moore and Smalley, calls for job creation incentives and help for wealth creators.
The feedback I have been getting from business owners is that there is no encouragement for them to go out and create jobs.
If an employer has to go through the difficult process of recruiting an employee and paying employers’ National Insurance at 13.8 per cent on top of the wages, only then to get taxed at up to 50 per cent on any additional income they earn from the business, then why give themselves the headache?
For example, I have knowledge of a business that this country should be proud of, that is manufacturing in this country, and that is global in its outlook, but at the moment is wondering why it should bother creating additional jobs.
We have too short-term a view in the UK. In Germany, for example, everything is geared towards making it attractive as possible to stay in business. It has a high proportion of family businesses generating wealth and providing people with jobs for life. In contrast in the UK from a tax planning point of view, the aim is to sell your business as quickly as possible at only 10 per cent tax and often when the company is sold, jobs are lost.
In the longer term, I would advocate significant tax breaks every five years or so for business owners who stay in business, keep their business profitable and continue investing in jobs and creating wealth. In this Budget, we need something that actually gives those in a position to create jobs, the confidence to do so.
The UK is not in a bad starting position to begin generating growth. We do not have the same problems that some Eurozone countries are experiencing; we have an independent central bank and our own currency. Granted, our own currency has been devalued, but this gives us a huge opportunity to grow our economy through exports.
This is a major reason why our Government has to be bullish and positive in its outlook and deliver a Budget brimming with job creation initiatives and incentives for manufacturers to be more rigorous in their pursuit of export opportunities.