I was concerned to read the first person article by Mr Michael Self in the Echo 7/6 - 13/6. Small business has a massive part to play in the economic recovery and growth of our country yet his views are utterly at odds with evidence which now stares us all in the face. Mr Self argues initially that the only way to repair the situation"...was to slash government spending and increase taxation."
In following paragraphs he concedes that this "tough medicine" has not worked before advocating further cuts and a lowering of taxes.
The government introduced the latter, cutting the 50p rate for instance, but only to the benefit of the wealthiest in society. Instituting a financial transaction tax, wholly justified, and increasing taxation would have helped, if tax increases had been deemed necessary after a concerted effort to collect it from those who methodically evade and avoid paying their share year after year.
The cuts the coalition have forced upon us have seen public services and a variety of benefits cut including child tax and working tax credits. If employers paid reasonable wages in the first place such tax credits would be unnecessary. Despite this borrowing, as Mr Self rightly states, has actually gone up not down.
Mr Self, quite justifiably, berates the government for money created through quantitative easing being handed to those banks, who, when they do agree to lend, do so with high interest rates attached. With Mr Osbourne announcing a further cash injection, would it not be more helpful to cut out the middleman and lend direct to small businesses with a nominal interest charge? This will not happen of course because, as Mr Self and others know, successive governments since Mrs Thatcher first entered Downing St have all pursued economic policies which favour the financial sector over manufacturing.
Mr Self's assertion that economic stimulation will be aided by creating a more "...flexible labour force.." beggars belief. Whilst I would agree some aspects of employment law could do with an injection of common sense, the notion that removing employee protections will help small businesses thrive is a nonsense. A low paid, timid, through lack of security, workforce bereft of loyalty commitment and drive, because that's the kind of workforce Mr Self and his kind will create, does not help develop a successful business. One might assume that Mr Self represents businesses which rely solely on unskilled labour since it would be senseless to invest in training a "throwaway" labour force which has no interest in the success of its employers. Furthermore, does he really believe that workers, constantly in fear of losing their jobs are going to spend what little disposable income they will have left over on expensive goods which may require loans or credit to finance? And who will extend credit to a worker with little or no job security? If our fast moving consumer based economy is to help any business grow, it must have a ready supply of people with money to spend!
Respectfully I modify the quote Mr Self both opened and closed his piece with and hope that he will perhaps reflect that in fact, "It's the economic model stupid."
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