The departing head of the National Federation of Enterprise Agencies, George Derbyshire, believes that scrapping Business Link could result in the Government’s flagship social reforms being undermined as funding and support for enterprise will be deemed inadequate.
David Cameron has an aim of using enterprise to improve areas of the country that are dependent on public spending and are being affected by the continual cuts. Mr Derbyshire believes that this goal will be hindered by slashing the business advisory service, which he says is “vital for a proportion of the population.”
Mr Derbyshire says that the dramatic cuts to Business Link were driven by “financial reasons” rather than long-term thinking.
George Derbyshire said: “Business Link is regarded as an expensive solution. I would like to think in a different financial environment we would be not be quite so reliant on the volunteer model as we are now. Volunteers don’t come for free.”
He added: “There are people who have the confidence and the skills to start up themselves and make a success of their business, and the confidence and skills to access online resources, and there are those that have access to friends and colleagues who can help them. But there is a substantial proportion that do need face-to-face help to build up their confidence and acquire skills and knowledge.”
Business Link costs £190m a year to operate and is used by around a third of all businesses. The Conservatives decided in Opposition that they would scrap Business Link, and the Coalition has now implemented those plans. Contracts will be terminated in November and the regional development agencies will close in 2012.
So where can start-ups go for guidance? Start-ups searching for help will be directed to the Business Link website, which currently attracts around 1.6 million visits a month. Time will tell if this is sufficient support for start-ups…
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( 3 / 209 )A report to be published today will show that tax experts are concerned about measures brought in by the budget, which could affect small businesses.
The Commons Treasury Committee asked a raft of experts to prepare a report on whether the budget taxation measures met principles of fairness, support for growth, certainty, simplicity, stability, practicality and coherence; the consensus appears to point to ‘unfair’.
Some measures were brought in to crack down on tax avoidance by the super rich but smaller employers could end up being caught, even though they have no intentions of avoiding taxes.
The Association of Chartered Certified Accountants (ACCA) said: “The sophisticated taxpayers who are the target of the legislation will typically take advice and will therefore avoid the tax charges levied by the new rules.
“There is a significant risk that the only employers who will be caught by the new proposals are those who stray within their reach accidentally, either because they are unaware of the need for advice, or cannot economically afford to take it – e.g. SMEs.”
The ACCA went on to say that the “highly complicated” anti-avoidance measures threatened to harm Britain’s economic standing in the world. It said: “ ... the legislation is now nearly 60 pages long and highly complicated. It will also create considerable uncertainty and compliance problems that will hinder the UK’s competitiveness and stifle growth.”
The report was commissioned by the Treasury Committee, as an aid for MPs who are preparing to debate the Finance Bill, which enacts measures set out in the Budget.
Andrew Tyrie, Chairman of the Committee said that the report was the first of what he hoped would be annual reviews of the budget, adding: “Britain has to have a better tax system: providing more certainty, simplicity, stability and coherence – as well as being fair.”
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( 3 / 180 )The Prime Minister, David Cameron, and Labour leader, Ed Miliband, clashed in the Commons yesterday during the first PMQ since figures were released, showing that the economy had grown by 0.5 per cent during the first quarter of the year.
The figures, from the Office for National Statistics, showed that the manufacturing and services sectors performed well during that time, but that construction output fell sharply by 4.7 per cent.
Mr Cameron conceded that he was disappointed that the growth figure was less than the 0.8 per cent forecast by the Office for Budget Responsibility but said that the overall news was positive.
During PMQ, he said: “What is encouraging in the figures is that the British economy is growing once again, manufacturing is up, exports are up, and we are seeing a rebalancing of the economy so we are not over-reliant on private consumption."
However, Mr Miliband argued that the figures did not show good news, as the economy had contracted during the last quarter of 2010 by 0.5 per cent and so now this ‘growth’ was merely an evening out of the economy.
Other reactions to the figures have been equally mixed, mainly depending on whic side of the political fence one sits. And some commentators are urging caution in the interpretation of the figures, whether positive or negative.
Graeme Leach, Chief Economist at the Institute of Directors (IoD) said: “The preliminary GDP figures are a very mixed bag with grounds for both optimism and pessimism. Pessimists point to the fact that GDP is stagnant with output unchanged over the past 6 months…But the optimists can’t be ignored either.
He went on to say: “The more important figure will be Q2, when we begin to see the squeeze on real incomes really kick-in and what effect this has on consumer spending, together with the implementation of the public spending squeeze”.
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( 3 / 250 )Figures dues out later today will almost certainly show that the economy’s recovery is too weak to trigger a rise in the interest rate set by policy makers at the Bank of England.
The latest Reuters poll shows that analysts expect gross domestic product to have expanded by just 0.5 percent in the first three months of this year, barely making up for the 0.5 percent quarter-on-quarter drop at the end of last year.
This news, while better than a contraction, which could have brought a double-dip recession, is not good for the Government, as the spending cuts and tax rises brought in to decrease the record budget deficit, are just beginning to bite. And some economists are criticising the speed and severity of the cuts, saying that they are putting the economy’s recovery at risk.
However, the news will almost certainly mean that, as predicted, the Bank’s interest rate will not rise until at least August, with some experts predicting November as the earliest date that a hike will be implemented. Predictions, however, are based on so many different factors and on such uncertain data that it is very easy to get them wrong.
For example, analysts were taken by surprise at a 0.5 per cent fall in GDP in the last quarter of 2010. The contraction was blamed on heavy snowfall in December, which cut productivity and stopped a lot of construction work. Now, however, others are saying that, even without the snow, there would have been no growth.
Many were also taken by surprise at the fall in inflation in March, which probably stopped rise in the interest rate earlier this month, which had been strongly suggested to increase by at least 0.25 per cent.
And now, with a very late Easter and a day off for the Royal Wedding bringing more than usual down time in April, experts are saying that predictions for the second quarter of this year are no clearer either. Who forgot to pack the crystal ball?
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( 3 / 246 )This weekend has seen us munching our way through almost 80 million chocolate eggs – many of which have, admittedly, been on sale since Boxing Day. But what it is about chocolate, which makes it irresistible?
Firstly, it has been found that the same alkaloid compounds present in alcohol are also found in chocolate; secondly, researchers in Italy discovered that chocolate contains a pleasure-inducing compound called anandamide, as well as other substances believed to mimic the effects of marijuana. And thirdly, the cocoa butter present in chocolate melts uniquely at just below body temperature, yielding a highly sensuous mouth feel.
And science has also revealed something that many of us already knew – women seem to be more prone to chocolate cravings than men. The Diabetes Association report found that only 15 per cent of males appear to crave chocolate, while as many as 40 per cent of women do – and 75 per cent of them claim that absolutely nothing other than chocolate can satisfy their sweet craving.
But what has chocolate got to do with the price of eggs – or a business blog – we hear you ask? Well, the price of cocoa beans, the essential ingredient for chocolate, has doubled in the last five years and just before Easter was close to £2,000 per tonne.
The cause of the massive price hike has been political unrest in Ivory Coast, the world's largest producer of cocoa, meaning that up to 400,000 tonnes have been locked up in the country's docks since January. This blockade was lifted just before Easter, meaning that prices dropped, but that was far too late for any reduction for the consumer before our biggest chocolate spending ‘eggstravaganza’ of the year.
Projections show that, despite the cost of the beans, chocolate sales are set to rise by at least 13 per cent over the next four years, meaning that consumers are bucking the sales trend when it comes to satisfying their cravings or showing affection to their loved ones. We might not be buying luxuries in these austere times but some things transcend luxury and become necessities.
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