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Sunday, 26 January 2014

How to improve our unemployment by helping small companies hire more and faster.

Here's my take on the matter

First of all, we need to get out of the EU for many reasons, but this blog is about business so I will restrict myself to this subject. As a caveat, everything below is on the assumption we have left the EU but are still a nation within Europe.

First of all, we must look at business and the EU. 

The EU is our biggest negative trading partner. What does this mean? It is simple. It means we import more goods from the EU than we export to it. This, in turn means, although it helps our shops sell more goods, it damages our manufacturing and damages our balance of payments.

The rest of our business area is the Commonwealth, the USA and the rest of the world, including South America, China and India. 

We would like to help Africans build up their trade in Africa but can't at present because we are forbidden by the EU. Mainly because a lot of trade with Africa would include food, and the French want to restrict that as much as they can.

If we left the EU we would be able to increase our manufacturing as we could then trade more with the rest of the world. We already export more of our goods outside the EU than we do within it. 
Any EU tariffs on our goods if we left would be matched by us. This means that if they say “You have been very naughty leaving the EU so we will put a surcharge of 20% on all your goods you export to us” we would retaliate by putting a 20% surcharge on their imports to us. 

Can you imagine the fights between the Germans and the EU or the French and the EU if that happened? Tariffs would soon be lifted. Think Mercedes, Audi, BMW, Citroen, Renault, Peugeot - not to mention French wines and cheese!

Tariffs would be illegal anyway as both Britain, and the EU, belong to the WTO (World Trade Organisation).

Our enemies say if we leave the EU jobs would be lost! 

There is no doubt about that. First of all,  our MEPs would be out of work. Our EU Commissioners would be thrown out. All British staff within the EU offices in Strasbourg, Brussels and Luxembourg 
, and many other cities, would have to go. No real hardship as most of these people live on their expenses, save their salaries, and many are now millionaires.

Then we need to look at how we can help business in the UK.

We need a healthy economy; so the first thing is to understand the private sector who are the only real tax-payers. The only money the government has is from taxes and borrowing. In the main, private sector workers tax pays for public worker salaries. The public workers aren't really paying tax, The money classed on their payslips as tax is really just returning some of the private sector's tax back to the exchequer.

Therefore it stands to reason we need more private sector workers than we do public sector workers. The only way we can ensure this is to expand the private sector and create a smaller government with a smaller civil service.

Now we can look at business. One of the reasons for the huge amount of red tape for business in the UK is that corporates have the ear of EU Commissioners. They suggest a lot of the red tape thrown at UK business as they can afford large departments just to handle this red tape. Usually the Managing Director of a small business has to handle this himself so, therefore, cannot be competitive enough to be a threat to the corporates. Corporates know they cannot move as nimbly as the smaller company.

The smaller business takes on employees. The corporates keep buying smaller companies and shedding employees. The newspapers are full of those doom and gloom stories whenever there is a takeover or merger. We must get our priorities right and only help the smaller companies. Why help the sector which sheds staff?

Once a company reaches 100 employees, they are pretty much established and can help themselves. So, for this blog I will concern myself with the smaller companies.

First we could consider company tax and halve it for companies under 100 staff. 

Then we could look at business tax and offer a two year 'tax holiday' if they increase their staff by 20%, and a further two year 'tax holiday' for increasing their staff by a further 20% (but only within the next five year period). 

Finally, for companies under 20 employees; we could offer them a whole year's Employers National Insurance contribution holiday for each increase in the number of staff, over the present number, they take on during the next five years. We have worded it this way to avoid them sacking staff and taking on others to get the 'NI holiday'. So if you sack three workers and take on five workers, you only get the 'NI holiday' for the two extra workers.

Finally, for exporters only; a further look could be taken at entertaining expenses. As a suggestion, if a company entertains foreign customers in the UK, the expenses could be tax deductible; but only export clients and only if the export earnings are substantial. However, a further look should be made to see if we can do more for exporters. After all this is the life blood for the UK.

All Corporates such as Amazon, Starbucks etc. would naturally have to pay UK tax as we would no longer be in the EU. They would not pull out as they charge the British more, and their profits are high. Amazon now deliver in major cities on a Sunday, for instance, as they sell so much online. Can you really imagine them packing up and moving out?

These are only ideas but just imagine how this would boost employment and exports in the UK?

If you feel I have left something out, or you see flaws in my suggestions, feel free to append them to the Comments Section below. I promise not to hurt you ... too much!

Ampers.

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