Home Business News 37 ways to rescue the economy, by Britain's brightest brains

37 ways to rescue the economy, by Britain's brightest brains

30th Nov 11 7:42 am

By entrepreneurs, industry moguls and economic dons

Cut VAT to five per cent for new buildings to boost construction

The number 1

Charlie Mullins, founder MD of Pimlico Plumbers:

“The one thing we could really do with is a cut in the rate of VAT to 10 per cent or even five per cent for new buildings and alterations to residential and commercial premises. This would further stimulate the construction and maintenance sector, over and above today’s announcements.”


Have a back-up plan ready in case the Euro collapses


Andrew Hawkins, founder, ComRes:

“The UK government should begin to draw the nation’s trading net deliberately wider than an EU that teeters on the brink of currency chaos. The very act of having a backup plan for the collapse of the Euro, for example by opening discussions with NAFTA, would reassure many that the government is prepared to act untrammelled in the national interest.”


Stop meddling in the private sector


Julie Meyer, founder and CEO of Ariadne Capital:

“The government must end its Santa Claus-type game that it continues to play, of handing out more money to individual enterprise programs or infrastructure projects. None of these programs will work. In 13 years of working with fast-growing young businesses, I’ve never once heard anyone claim, ‘Were it not for X, Y or Z government program, I wouldn’t be a business success’. The government needs to focus on doing less and getting out of the business of running things. Politics cannot keep up with economic forces.

“Government should not try to figure out which projects to back, or which teams to back. The ultimate confidence move would be to trust British people to build the right companies, spend with their own money, and invite investors from around the world in to back our projects. By enabling people and businesses to keep more of their own money by small business tax holidays and lower income tax, business owners and citizens would build and spend. When they do, they create growth.”


Legalise drugs to fund investment in the creative industries


Steve Henry, advertising creative and founder of HHCL and LondonlovesBusiness.com columnist:

“The government should invest in the creative industries. Britain is still a global leader in this sector, but only just, and creative people ‘make’ stuff out of difficult situations.

“At a conference I attended recently various speakers talked about the emerging markets – the massively growing middle classes in China and India etc. They’re going to have global economic dominance for the next 20 years, so let’s invest in British perversity and originality.

“Also, let’s teach everyone to write computer code and then everyone can create. The government could fund this investment by implementing the Robin Hood Tax [financial transactions tax] and legalising drugs in order to generate tax revenue.

“In the advertising sector George Osborne should cut back on regulations, create tax breaks for training initiatives, talk up the industry and put government money into marketing.

“The government used to be the biggest advertiser in the country, and then they decided to cut back. But history shows again and again that brands which invest in marketing come out of a recession in a much better shape than those that cut back.

“Britain as a brand will suffer unless it has a proper marketing budget.”



Promote the ‘Made in Britain’ brand properly to boost exports


Denys Shortt, founder of £120m turnover pharma distriubution firm DCS Europe:

“Make sure that the UK section at tradeshows looks as amazing as Germany or the Turkish displays! We looks like the paupers at the moment compared to these countries

“To promote Made in England the chancellor could insist that all products in the UK carry Country of Manufacture. To protect jobs in Britain and to promote British manufacturing we need to know what is Made in Britain.”


Halve the number of civil servants


Charlie Mullins, founder MD of Pimlico Plumbers:

“The civil service is still massively bloated. I’ve said it before: we could lose half of the current crop of civil servants and not notice from an output point-of-view. Clearly making so many unemployed overnight would cause another problem – but in five or ten years time we could do with hundreds of thousands less of these meeting wallahs, who add nothing to the economy.”


Ditch heavy industry and focus on internet start-ups and education


Ning-Li, serial entrepreneur and co-founder of Made.com:

“George Osborne should be focusing on the service sector and internet start-ups as these have the potential to grow rapidly. He should steer away from heavy industries as they are capital intensive. Internet based companies are easy and cheap to start.

“Cloud computing has made it so much simpler for people to start a business and there are huge opportunities there for companies. The game is changing too rapidly for the big players; it is the young start-ups that are able to react to changes in technology, mobile, i-Pad and social media.

“The other area to focus on is education, as this is what ultimately drives innovation. When you look at the macro-economic picture countries are starting to specialise more and more and Britain is exceptionally strong in innovation and design. We should play to those strengths.”


Stop forcing entrepreneurs to risk their homes when they apply for the EFG


Nick Pelling, founder of security camera manufacturer Nanodome:

“I think the chancellor should change back the terms of the Enterprise Finance Guarantee scheme so that participating banks can’t require entrepreneurs to put their primary residence on the line first. This is what the older Small Firms Loan Guarantee did: I believe this change is the number one reason why EFG lending has foundered so badly. I wrote to the Chancellor to point this out: not sure if he got the message, though.”


Cut taxes on food and drink served in pubs so they can employ more local people


Iain Loe, manager, Campaign for Real Ale:

“A cut in VAT for food and drink served in pubs, restaurants and so on to five per cent would give a real boost to this sector. It is allowable under EU regulations and countries such as France and Ireland have seen many thousands of jobs created in the hospitality industry by cutting VAT. The chancellor should also abandon his plans to increase beer duty by two per cent above the rate of inflation in his next Budget. Pubs and pub goers should not be penalised by yet another increase in beer duty. A freeze in beer duty would be a boost to the brewing industry where there are now 900 breweries. And the Treasury would find that they would take in more money and the cost would be fiscally neutral.”


Launch a profit-share investment fund for tech start-ups, financed by state money, managed by entrepreneurs

Rebecca Burn-Callander, web editor, Management Today:


“The government should launch an independent scheme, backed by state money but managed by successful tech entrepreneurs, which invests in smart new technology. This vehicle could take a small stake (capped at a minority percentage), bring these projects to fruition and get paid if the company is bought, or made public. There could even be a profit-share model. Inward investment would go bananas. Foreign firms would be fighting each other off to nestle among our tech high-flyers – a real UK Silicon Valley-esque boom. There would be sizeable R&D tax breaks in the mix.”


Give companies that invest in capital expenditure a VAT holiday


Rowan Gormley, founder, Naked Wines:

“First, we need to break the vicious circle.The government doesn’t have any money to invest but companies do. They aren’t investing because times are uncertain

“If the government gave a VAT holiday for companies that invest in capital expenditure:

1. It will release cash tied up in companies’ bank accounts, stimulate growth and create jobs

2. It will make Britain a more efficient exporter”


Ditch the politicians and bring in entrepreneurs


David Brown, co-Founder CEO of Ve Interactive:

“What could be cut is the number of politicians employed across the country and their associated benefits. Quite a few could be replaced by seasoned entrepreneurs from industry who would advise for free. It would be the equivalent of playing football for your country!”


Sponsor “manufacturer hackspaces” so start-ups can experiment with high-tech kit


Nick Pelling, founder, Nanodome:

“If the coalition had any kind of genuine interest in seeding manufacturing in the UK, what they should do is sponsor some manufacturer hackspaces [an area with lots of high-tech kit lying around for start-ups to experiment with], like London Hackspace but kitted out with killer stuff for building physical things. Out goes the toy stuff like the MakerBot, but in come the 5-axis mills, the Solidworks, Rhino3d, Moldflow and OneCNC licences, the EOS direct metal laser-sintering box, the 70-ton vertical plastic injection moulding machines, the computer controlled lathes, etc.”


Make the country’s richest pay for their own healthcare


Andrew Hawkins, founder, ComRes:

“The biggest budget line – the NHS – has to contain the most scope for cutting. It is indefensible for the Earl and the business tycoon to get free board and lodging when being treated as an NHS in-patient. It is also pretty unjust to tax low income earners to subsidise the operations of those who can afford it.

“So I would require that where people are privately insured, or are in the top tax bracket, they should be required to pay or have their insurer pay for some (non-emergency) NHS treatments. I would also take some elective procedures out of public funding altogether so that the NHS is there for people who really need it. It is equally as unjust to expect the State to pay for the medical treatment of those who can afford to pay for it as it is to expect the State to fund housing, food or clothing.”


Reinstate the Highly Skilled Migrant Programme visa, so tech companies can get the skillsets they need


Spencer Hyman, former COO of Last.fm, founder and CEO of artfinder.com, investor:

“Bring back the Highly Skilled Migrant Programme visa so tech companies can round out team skill sets with some critical hires with specific skills that don’t exist in the EU. At every start up I’ve ever worked in (Amazon, Last.fm, Artfinder) we’ve had to use HSMPs to bring on key skills.  We’d rather not to have had to bring in people from abroad – it’s more expensive, riskier and time consuming.  But it’s been the only way to get those skill sets.”


Focus on high-value rather than high-tech manufacturing, and turn RBS into a state-backed investment bank to do it


David Merlin-Jones, director of the Wealth of Nations Project at independent think tank Civitas:

“The Autumn Statement had one major omission: support for low- and medium-tech manufacturers. We need to encourage all kinds of manufacturing, not just specific types that have come to the government’s attention. We should be focusing on promoting high-value industry, and in Britain, it is often the process of production that creates the value, especially if the product is quite basic.

“The chancellor should be investing in providing these companies with the means to grow, and the real barrier for many firms is a lack of financing. In 2010, the number of SMEs wanting a loan increased, but so did loan rejections. The private financial sector is failing the UK and the Government should step in to find a permanent answer. The optimum solution would be the transformation of RBS into a state-backed investment bank.”



Get consumers to buy more British produce rather than imported food


Chris Gee, sales director, SilverDoor: “George Osborne should launch a major initiative to encourage Britain to consume a much higher proportion of British produce. Why do we continue to import and consume so much French water, Danish bacon or New Zealand butter? Thousands of extra British jobs would be created, and there would be extra environmental benefits too from the massive reduction in food miles.”


Create grants for SMEs offering apprenticeshi


Lesley Clarke, founder, director and current owner of Nicky Clarke Salons:

“Apprenticeships are the foundation of the hair salon industry and require huge amounts of investment and resources from salon owners. To help maintain the quality of training employment opportunities we need to see some form of apprenticeship grants being created, especially for SMEs.”


Talk positively about the economy to revive the retail sector


David Hathiramani, founder, A Suit That Fits:

“I think changing the tone of the conversations regarding the economy into a more positive conversation could instil more confidence to spend.

“Everybody understands that we have problems; however, people who are in jobs have low interest rates and low mortgage repayments, so they should have more disposable income. Unfortunately, all of the people who are in this category still have a huge fear – so we need to overcome this.  It would be great for the government (and the opposition) to focus on the positive aspects, and really encourage spending.”


Give UK companies preference for public infrastructure work


Mark Mills, chairman of national accountancy firm HURST:

“When building either infrastructure such as roads, or large capital projects such as the proposed A14 toll road, there should be recognition of UK bidders for the business (in spite of EU regulation) so that capital does not flow out of the UK.”


Move away from higher education and teach more vocational skills


Kevin Poulter, associate, Bircham Dyson Bell LLP:

“In the domestic market, investment is still needed in school leavers, the teaching of vocational skills in much needed trades and specialisms and a move away from the expectation and incentivisation of further and higher education.”


Give the 4G cellular spectrum away free to incentivise companies to improve download speeds


Rowan Gormley, founder, Naked Wines:

“Instead of auctioning the 4G cellular spectrum, it should be given free to the companies that build the fastest networks. Download speeds in central London are 1/60th of those of Tokyo. They are slower than downtown Harare. Cleaner, greener and cheaper than new railway lines.”


Help early-stage small businesses find alternatives to debt financing


Jane Reoch, investment manager at the Centre for Entrepreneurship, Cass Business School:

“Debt financing is not always the right option for younger companies.  Providing longer-term capital to the UK’s best small businesses (e.g. £0.5m – £5m turnover) would help achieve more sustainable growth; and also avoid the basic problem of over-leveraging.

“As the government starts to properly address the debt burden, there have been many areas of cut-backs.

“To me, it’s all about the right allocation. Is the level of our contribution to Europe correct? Would part of this be better directed towards the high-performing SME’s in the UK? As with any business, each cost needs to be examined to ensure it is delivering real impact, and results.”


Make the UK more business-friendly by cutting taxes


Greg Secker, founder and CEO of trader coaching company Knowledge To Action:

“Reduce the 50% tax on high earners; it simply targets the wealthy, who will move away from the UK and go elsewhere to both live and do business.

“The huge taxes businesses face also need to be addressed. We’ve already seen some businesses move their headquarters away from London to elsewhere in a bid to find a better deal – Cadbury openly moved to Switzerland to avoid high taxes – and it’s incredibly damaging to London’s reputation as a business leader and is restricting growth.

“It’s really very simple – the success of a business is dependent on its environment. Currently London is an extremely inhospitable place for businesses.”


Slash red tape in the financial sector


Sir Michael Snyder, chairman, Kingston Smith:

“What the financial services industry needs is to cut red tape and bureaucracy so that we can make our contribution in pumping money into the economy.”


Offer small business grants via the internet


Mark Mills, chairman of national accountancy firm HURST:

“He could offer grants accessible via the internet, checked to avoid fraudsters, offering SMEs help with marketing, utility costs and reductions in business rates. This injection into the economy to small businesses would provide stimulus immediately – there could be conditions regarding repayment if falsely acquired, to provide protection.”


Ease parking charges to encourage consumers to shop


Lesley Clarke, founder, director and current owner of Nicky Clarke Salons:

“Inner city parking and congestion charges are all adding to the cost of a typical shopping trip and this is heavily affecting retail confidence. It can now cost in excess of £15 in cities to park your car for the day. In London, it’s likely to cost at least £30.”


Fund a mentoring scheme to encourage business thinking among young people


Jim Boulton, partner, Story Worldwide:

“The obvious project that springs to mind is Tech City, the Olympic legacy project that seeks to position East London as a high growth, entrepreneurially fuelled technology hub. A government-funded scheme to mentor young business people, motivate school and university leavers and re-train young people who have gone down dead-end career paths, would go a long way.”


Deregulate employment law for SMEs


Helen Reynolds – Chief Executive of HB RIDA, a private equity vehicle that invests in SME recruitment businesses:

“For SMEs employment deregulation has to be a step forward
.  A broad brush approach to employment regulation whether you have five employees or 5,000 has never been a fair state of affairs. It is important for small businesses to be able to manage their human resource effectively and practically.”


Found a government-owned bank run by private sector professionals to lend to successful small businesses


Kate Craig-Wood, MD of SME, Memset:

“What I would like to see is Osborne setting up a government-owned bank with the specific mandate of lending to small businesses with a proven revenue model, who could accelerate their growth with additional capital. I foresee such a bank facilitating the development of our own “Mittelstand” – the German-owned SMEs that are the powerhouse of the German economy. Such a bank should not be run by civil servants, whose track record is no better than the bankers’, but by private sector professionals with expertise in high-growth SMEs.”


Employ a more efficient network of government advisors


Ajit Chambers, CEO, The Old London Underground Company:

“If your advisors are not working differently in this financial environment – retrain or replace.

“We have had many meetings with TFL, London Underground and the Mayor of London, and we have learned that a multitude of excuses are used by ‘the gatekeepers’ that are actually not what the executive or leader sanctioned at all.

“It is crucial that the UK’s government is directly persuasive in large business deals rather than letting such misnomers occur, many of which fall under the excuse of Health and Safety Bureaucracy.”


Get tougher on utility suppliers to save businesses money


Chris Cole, founder, Make It Cheaper:

The government should do more to get tough on business utility suppliers that automatically renew contracts for their customers without their consent. For example, a supplier of electricity to a business can change its prices at the same time as renewing a contract without the bill payer’s say-so or even them being aware it’s happening to them. By the time they do realise, usually because their bills have suddenly doubled, they are locked in for another year.”


Encourage the rich to invest in property not pension funds


Matthieu Cany, managing director, Sextant French Property Agents:

To promote growth in the property sector in the UK and overseas I think it would be a good idea to offer more tax breaks in order to motivate cash rich individuals to not place their money in pension funds (who speculates on the sterling or the euro) but in New Build properties which will boost the construction sector and create more jobs.

“The new jobs will generate more CIS and PAYE taxes which will help the government to get its money back on the tax breaks. This is a very classic measure in France to give tax breaks with the idea of getting it back from income tax paid by jobs created.”


Suspend stamp duty for first-time buyers


David Barnett, CEO of developers Londonewcastle:

A simple solution to ease restriction on housing supply could be a two-tier planning system where large schemes are dealt with by one centralised body at a high level (eg the GLA) – obviously with a full public consultation process in place – and smaller scale domestic developments being dealt with at a local level.

“We feel that stamp duty for first time buyers – under a certain threshold – should be suspended until a more normal mortgage and debt market returns. This could be balanced out by an increase in duty levied on sales to overseas buyers, who are benefitting already from the favourable exchange rate.”


Banks should work alongside business angels


Keith Wilson, founder and partner, Bradenham Partners:

“Banks should be encouraged to work alongside business angels and specialist investment houses by supporting small businesses pound for pound with overdraft funding. Young people are this industry’s and also  the country’s future, so creating  greater rewards for companies taking graduates or young people off the dole is a critical incentive. I would suggest no employee or employer NI for 12 months associated with such placements.”


Dramatically improve defence policy and judicial processes


Nick Telson, co-founder of Design My Night:

I would like to see a streamlining of the judicial and public enquiry review process as I think we waste too much time on enquiries that just tell us what we already knew.

“I think there are improvements to be made in the defence budget – I read yesterday that a new air force carrier today has already cost us £4bn and it hasn’t even been delivered. Smarter foreign policy could save billions and lives.”


Invest in skills, not just ‘hard’ infrastructure


Malcolm Edge, UK Head of National Markets at KPMG:

“It is encouraging to see so much investment in Britain’s ‘hard’ infrastructure, yet business needs more support when it comes to the ‘soft’ backbone of the economy.  The chancellor’s proposed youth contract is certainly a step in the right direction, but it is not just about placing the unemployed in any job – business will only grow if the right people are given the right skills for the region in which they live.  We need to see more investment in skills so that the accusation that new entrants to the labour market are not work ready can no longer be levelled at school leavers.”

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