Economic Plans

UK GDP only grew by 0.2% in the first quarter of 2010, lagging behind the predicted 0.4% growth rate widely expected by many. This minute growth shows that we are far from being out of woods where economic growth is concerned. This country now needs strong economic strategies to increase the growth and to prevent a further dip back into recession.

At present, the country’s deficit is some £167 billion this year. In 1997 when Labour came to power our national debt stood at £350 billion – today it has more than doubled and stands at £776 billion with interest rising at a rate of £5,000 per second. Frightening figures to say the least!

As we enter the last days before the General Election on 6th May, we need to be considering the main issues that any future Government must address:-

• This country currently has a high unproductive public sector with high finance leaks and little accountability;

• This country currently has a small wealth-generating private sector which constantly has its hands tied by taxation;

• This country has an aging population, which will only increase, who are struggling to survive on low pensions forcing many onto the poverty line;

• This country has a million unemployed youngsters who feel despondent about their futures and are empathic to the political arena as politicians fail to engage with them.

The future of this country is very much dictated by implementing the correct economic policies that will not only see us through the current economic climate but also steer us into a brighter and more stable growth pattern.

Our political parties now need to define clearly their strategies and plans for this future growth to ensure that the voters can make an informed decision when casting their votes.

Labour have failed to give a clear and workable recovery plan to date – it would appear that their policy is more of the same which has clearly not worked.

Conservatives sprout figures convincingly but do seem to be relying on huge cuts in public spending – let’s hope this does not mean poorer service levels across the board. They have also failed to see the advantages of tax increases and closing of tax loopholes that only benefit the wealthy within our country.

Liberal Democrats seem determined to trash the pound and join the Euro. As Greece tips over into bankruptcy their economic situation can only have a negative effect on the Euro. Timing for the Liberal Democrats could not be worse as entering the Euro at the present time can only spell disaster for our fragile economy.

Let’s stop the chat and the bickering and see some strong and workable economic policies that will nurture our economy and see the national debt decrease and confidence increase.

Call that a Budget?

As you are aware yesterday was Budget Day for the UK and probably one of the most important days of the last thirteen years for the Labour Government. Yes – it truly was a make or break day and I am sorry to say everything broke for them.

In light of the current economic situation, the vast debts Britain currently has and the prediction that by 2015 the country will be in the red to the tune of £1.4trillion, I for one, was hoping for a show of strength, for Alistair Darling to finally show us the plans the Labour Government have for steering us out of the recession and into more stability. Unfortunately what they gave us was a Budget with more potholes than our roads!

No surprise that Alistair Darling hit the usual money-grabbers such fuel, alcohol and cigarettes (luckily I don’t drive, smoke or drink Cider) as you can always depend on them to be at the forefront of any Government’s stealth tax plans but the real shocker was how badly the figures seemed to add up.

One example of this is the plans to abolish Stamp Duty for first-time buyers up to purchases of £250,000 and the respective introduction of a new 5% tax for homes sold for £1million. On the face of it this can only be good news can’t it? – surely it’s going to kick-start the property market? No – when you look a little deeper the expected figures are miles apart with the expected Stamp Duty break costing £550million by 2012 and the expected income from the “Mansion Tax” only generating some £390million – leaving us with a colossal shortfall.

For the small business owner like myself the figures are still as frightening and I can still see no long term strategy in place to assist me in keeping my business up and running. Yes, the Chancellor did announce a £2.5billion package and around 500,000 companies may benefit from a one year reduction in business rates but the increase in Employers’ National Insurance rates in 2011 will costs companies around £10billion.

Tax for the hardworking ordinary people also took an indirect hit. Whilst there was no tax increase, and for small things we have to be grateful, Darling did freeze the threshold levels. In real terms when this is related to the current rate of inflation of 3.7%, the Government will still manage to raise some £2.2 billion from us.

As I sit here pondering over the finer details of yesterday’s Budget, I shake my head in dismay. There are no positives here, there are no long term solutions here and there is no light shining at the end of the tunnel here. Darling and Brown have tried to temporarily fix the pot-holes and tried to keep the staunch Labour voters on board for the election but this budget had more water leaks than many of the London roads. Labour may well have hammered the final nail into the coffin – we will have to wait until May to see the real reaction from the voters.

Out of recession - I don't think so.............

January saw us mark the end of the recession – the longest economic downturn on record.

Whilst our Government will surely be patting itself on the back and thanking their lucky stars that we stayed out of depression, I and many others will have little faith in this news. We would be wise to remember that during this recession we have seen the economy reduced by over 6 percent and unemployment rise to 7.8 percent.

I do believe that this may be a temporary step forward. We have to remember that the figures used are for the last financial quarter which includes increased employment of temporary Christmas staff, increased purchases of luxury goods before the VAT rise took effect, the car scrapage scheme coming to an end and people spending slightly more in order to enjoy the festive season.

In April we may well see a step backwards as we see taxes rise as income tax and national insurance rise. As inflation rears its ugly head we may also see an increase in interest rates.

As I write I can see little is being done to stimulate the economy for growth and I do not see a sustainable economic strategy. We are unprepared to take full advantage of the small GDP figures and should not confuse the end of a recession with a start of growth.

We are a long way from seeing real evidence of our recovery and ordinary folk will see little evidence of the end of the recession in their everyday lives.

A Newsletter of Worth

My company, DP Consulting (Disability Equality Services) Limited regularly assesses how it can increase inclusion to mainstream activities and I believe that raising awareness of disability issues does just that.

As a new medium we have implemented an innovative E-Newsletter which, in our first issue focuses on Disabled People and Work. Firstly, we take a look at the situation with the Incapacity Benefit Reform. And the second article examines Disabled People's Job Prospects in a Recession.

As disability equality consultants, we are very keen for disabled people to live and work on an equal footing with their non-disabled counterparts. So these issues are very important to us.

Please take a look and I do hope you find this informative. If you wish to receive our E-Newsletter on a regular basis please contact murali@dpconsulting.org.uk with E-Newsletter in the subject line.

Breakfast Speech by Dr Vincent Cable MP

What a week I have had last week! Busy to say the least.

On Monday, I had the pleasure of attending a Business Breakfast Budget Briefing hosted by our local MP, Paul Burstow. Our guest speaker on this occasion was the Liberal Democrat Shadow Chancellor, Dr Vincent Cable MP and I really enjoyed his insight into what this quasi recession mess that we are in means, why we are in it and how we can get out of it.

It was refreshing to hear that Vince truly understands what it is like ‘on the ground‘ and he proposed changes that would make a real difference. Some harsh decisions are necessary and in particular an holistic approach to cutting public spending is required.

A Questions and Answers session took place after his talk and an enthusiastic audience of local business owners posed many fascinating questions for Dr Cable – he dealt with these very effectively and his answers were clear and concise.

Whilst it is clear that some businesses have continued to trade effectively, the vast majority face new struggles on a regular basis ranging from cash flow pressures to retaining/obtaining banking facilities. We are all having to make decisions to ensure the survival of our businesses in these difficult times and with a deluge of information being thrown at us about how long this economic climate will last and how best to survive it, we sometimes struggle to see the light at the end of the tunnel.

I cannot provide any pearls of wisdom that will prove enlightening to all, other than to hunker down and just wait out the storm. Plan now for after the upturn so that you are in the perfect position to make strategic growth decisions and re-embrace the marketplace when the “sunnier” days come back.

Gordon Brown, His Recession Plans and Access

Previous recessions have been dealt with by different governments in different ways. I am not alone in saying that the depth and predicted duration of the current recession is extremely severe. In the past, as they were minor in comparison they were dealt with by changes in fiscal policy i.e. changes in interest rates, VAT, income tax rate, personal allowances and so on. It has been clear that changes to fiscal policy alone would not work to get us out of this hole we are in. Therefore, further stronger and what can be seen as more radical tools need to be used.

In Gordon Brown’s latest effort to boost the economy he has decided to spend billions of pounds of the tax payers monies on not only “bailing out” the banks but also trying to bring forward public expenditure on capital projects but in the spirit of my blog, I need to bring this into the access arena.

I am concerned that when these projects are being forward, often and more so recently, the access considerations are being scrutinised even more closely and then cut back or not done at all. Therefore, it is all well and good saying build these millions of buildings but then the developers look at where they can trim their costs. Once again access issues get overlooked and disabled people are again pushed to the sidelines. This is a clear issue which needs to be addressed and the Government must spell this out and if necessary the force of the DDA needs to be felt by the violators. Maybe this is a topic that the Equality & Human Rights Commission needs to look into.