Ask James Caan – Issue 73
Yesterday saw George Osbourne delivered his autumn statement in the midst of a global recession, increasing unemployment and declining growth.
It was bad news when it came to growth and jobs, with the OBR stating unemployment is set to increase even further before falling back by 2016.
However, there were some promising proposals to stimulate growth with measures focusing on investment and initiatives aimed at tackling youth unemployment. What struck me in particular, however, was the support pledged to small businesses.
The UK is one of the most important trading centres in the world and our SMEs are crucial to the recovery – it’s not surprising that our business’s confidence has been affected by the current downturn.
To get us back on track, the Government needs to make it easier for businesses to employ new staff. At present, the two biggest frustrations for SMEs are obtaining finance and the red tape surrounding employment law.
The credit easing programme and national loan guarantee are steps in the right direction, as is the initial £1bn made available through the business finance partnership – but I can’t help thinking we’ve been here before.
The previous commitment made to small businesses concerning credit – whilst a positive move – still proved difficult to obtain finance as a result of the banks’ resistance. As they say, the devil is in the detail and so I’m looking forward to seeing if things are made easier.
One step in the right direction was the reform of employment law. Under new proposals, it will become easier to hire people and they will be a reduction in ‘delay and uncertainty’ in the collective redundancy process.
Hiring new staff is an expensive process, with many organisations concerned with the loss of resources if it doesn’t work. The reduction of red tape will, I believe, speed up the recruitment process and be of great benefit to not only unemployment, but the sentiment of business.
The biggest focus when it came to jobs was on young people. The proposed £1bn youth contract set to tackle the record number of unemployed is promising news. Not only will it fund wage incentives and pave the way for internships, but it will start to show the private sector the true value of this workforce.
Overall, the Chancellor must and will stay the course and retain confidence in the UK. By setting a strong and stable course to reduce debt and taking action to support growth, I trust we’ll start to see unemployment decrease and see SMEs once again prove their worth to the British economy.