Following on from my Frazeresque (Dad’s Army, not Seattle) rant on the state of the economy on Monday, I thought I would set out my simple and innovative approach to saving the economy.
It is pretty well proven that
• Small businesses can generate employment faster than large enterprises;
• Small businesses will seize on opportunities faster than large organisations can bring together a cross departmental working group to even write 2 sides of A4 on what their ‘terms of reference are;’
• Younger people save less and spend more as they start to build a home for themselves and think buying anew car is somehow an investment;
• Iced on top of these universal truths are political leaders that proclaim how to remain competitive the UK must be leaders of the knowledge economy and we have a greater number of graduates today than we have had at any time in the past.
So now, more than anytime in the past 30 years, the Government should use fiscal policy to generate a massive shift in their own and investors approach to small companies that can innovate. What does this mean?
Well, any company that employs less than 100 people should be able to hire up to 1 employee per 10 already employed on a 24 month fixed term contract. As long as they are under 25 years old at and paid least twice the minimum wage (around £23.5k). In return the Government will let them deduct the total tax take for that individual from the company’s corporation tax (around £3.5k excluding NI) for the first or second year as chosen by the employer.
These are generous terms that would contribute to increase the UK’s aggregate demand, generate growth from spending, reduce unemployment and the long term burden on Government spending.
More importantly than benefiting the economy as a whole, is the lasting effect on companies that innovate in a tough environment that will gain the most. These organisations would be able to access bright young talent more cost effectively with a manageable risk profile and have a global advantage to go on and innovate even more.
It is pretty well proven that
• Small businesses can generate employment faster than large enterprises;
• Small businesses will seize on opportunities faster than large organisations can bring together a cross departmental working group to even write 2 sides of A4 on what their ‘terms of reference are;’
• Younger people save less and spend more as they start to build a home for themselves and think buying anew car is somehow an investment;
• Iced on top of these universal truths are political leaders that proclaim how to remain competitive the UK must be leaders of the knowledge economy and we have a greater number of graduates today than we have had at any time in the past.
So now, more than anytime in the past 30 years, the Government should use fiscal policy to generate a massive shift in their own and investors approach to small companies that can innovate. What does this mean?
Well, any company that employs less than 100 people should be able to hire up to 1 employee per 10 already employed on a 24 month fixed term contract. As long as they are under 25 years old at and paid least twice the minimum wage (around £23.5k). In return the Government will let them deduct the total tax take for that individual from the company’s corporation tax (around £3.5k excluding NI) for the first or second year as chosen by the employer.
These are generous terms that would contribute to increase the UK’s aggregate demand, generate growth from spending, reduce unemployment and the long term burden on Government spending.
More importantly than benefiting the economy as a whole, is the lasting effect on companies that innovate in a tough environment that will gain the most. These organisations would be able to access bright young talent more cost effectively with a manageable risk profile and have a global advantage to go on and innovate even more.
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