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Wednesday, 29 February 2012

Budget Wishlists

Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce


One by one various groups and organisations are issuing their Budget Wishlists to the Chancellor. A host of very laudable requests of the Chancellor of the Exchequer are being made and certainly there are many that the Chamber itself might otherwise have been asking for on behalf of Greater Manchester’s business community itself.


So why didn’t we and why only four requests? Because it's simple. The Chamber maintains that the Government must stop tinkering and deliver a Budget that is clear and can create confidence for British businesses. Sure there are many things to be done, but we must also remain realistic about the financial constraints within which the Budget will be set and what can actually be delivered, both economically and politically, and what will practically appeal to business, e.g. a well meaning National Insurance Holiday for small businesses was poorly targeted and heavily undersubscribed when in fact it could have been easily automated with Government will.

Since the last election the Coalition Government has ripped up the rule book in many areas: Regional Development Agencies for example, the creation of Local Enterprise Partnerships, the Localism Act and the abolition of BusinessLink. This has led to considerable uncertainty for businesses and we must now deal with this and allow the processes to deliver the changes whether we agree with these or not. Simply calling for changes now would add further uncertainty when what is needed is stability. Government has also announced a programme of changes to the corporation tax regime to be implemented over a number of years, proposed reform to reduce red tape and talked about the re-balancing of the economy towards the regions. For these reasons we see no gain in trying to argue for many polices that are already in the pipeline.

So we want a clear and simple Budget, with no tinkering, no gimmicks and free of politics. We remain in the throes of previous announcements and are now being subjected to the political tomfoolery of announcing the announcements.


The concerning thing is that the Government persists in creating small initiatives and pots of money that grab the headlines with simplistic sound bites, but are in reality complex and require understanding and time to access or place a bid. One such scheme is the £1m Portas Pilot for the high street. The high street must change, but only 12 town centres will be successful, though now it seems every district or town centre wants a slice of this money. £85,000 may result in a net gain for the winning centres but what difference will it really make? The really worrying thing about this bidding process is that collectively the cost to the public purse of civil servants and town hall officials debating this issue and preparing their bids will far exceed £1m. This scheme should be abandoned immediately, so that the public sector remains focused on dealing with the issues facing local areas and isn't distracted.

Considerable effort is taken to prepare Budget Wishlists. We’ve adopted a pragmatic approach that will allow business to settle and create some much needed stability when there is a world of uncertainty around us.

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