With the melt down of the global banking system we have to find a new economic model said Gordon Brown last week on the BBC’s Today programme. He went on to say that the UK has had a history of finding new ways of creating wealth and cited the growth of the Creative Industries as an example.
But Mathew Parish in the Times on Saturday summarised the vox pop wonderfully by saying that we are stuffed. Our economy has hit a tree ad the only way forward is that we must learn to live within our means. As a businessman in the creative industries sector I would like to offer my views from the trenches. Firstly the creative industry is generally made up of small businesses many under 20 people strong and if you are looking for growth from these types of companies you have to give them direct incentives to grow as well as remove the fear of growth. The Banks have abandoned us. We cannot operate in a vacuum we need our customers and suppliers to be in on this.
We must be bold says Gordon Brown. Well how about this simple bold 3 point plan ?
1. Remove the tax on business growth. If the banks won’t capitalise our small businesses then let them keep their own profits to grow. Abandon corporation tax for small businesess.
2. Cut the tax on employment. Abandon the employers NI contribution.
3. With this reduction in tax from business there will be a need for a drastic cut in public spending. Government needs to do what the private sector has had to do. Live within its means.
a. Cut salaries and jobs. Starting with the rediculous levels of some public sector salaries and last salary pension plans
b. Cut overmanned and underperforming departments
c. Maintain the welfare state as a support mechanism for health,social security, work and pensions etc, but review all the non performing and outdated FCO departments, government office departments and regional government organisations.
d. Cap rates increases on local government forcing them to review their staffing and service levels.
e. Get the numbers of people in the private sector vs the pubic sector back to the kensyan ratios of 60:40
