Today provided yet more evidence that the Chancellor’s Plan A, the plan to reduce the deficit and tackle the root cause of the UKs economic instability, is working.
The budget deficit for this fiscal year to date (April 2011-Jan 2012) was reduced by £15.6 billion, more than the predicted £9 billion, showing the deficit reduction plans have moved ahead of target.
This committment to this deficit reduction is one of the only things keeping markets confident in the UKs ability to ride out this financial storm. This confidence ensures that interest rates are kept low, vital for everyone’s ability to rapay personal debt.
Whilst growth is still slow and is predicted to be slow for some time to come, positive signs emerge every day that the UK is on the right path to recovery. Mortgage leading in up 10%, the motor industry is exporting extremely well to the Chinese market, banks have improved their profitability, and numerous retailers have recorded fantastic growth.
More can be done at this stage. Far from cutting ‘too far too fast’, the government is not cutting enough!
Further reports have shown that the 50p tax rate is simple not bringing in the necessary funds to the Exchequer. This needs to be cut, allowing for those earners to utilise their spending power. Corporation tax could be reduced from 26p to 20p. Small businesses often work on a very tight budget, and any reduction in costs would allow for a reallocation of funds, either into employing another member of staff (if the red tape wasn’t a crippling factor here), or into new technologies that could lead to essential growth.
Each point leads to a necessary rant about Europe, but I shall leave this to another occassion. Small businesses really can contribute to the regeneration of our economy, but they are being strangled by the bureaucracy and ludicrous tax burdens placed upon them by Europe.
Time to step up a gear Osborne.
Former BUCF President (2010-2011)