Growth Forecast from the BCC

The British Chambers of Commerce have marginally downgraded their growth forecast. These projections, of point this and that, are really not the story. The BCC acknowledges the importance of re-balancing the economy from domestic consumption to manufacturing and exports and this cannot be achieved without near flat lining while the changeover is in play. They also predict the interest rates will rise sooner, in August, rather than later. This would be good news for inflation, though not so good for exporters if the pound rose by more than a whisker.

There is now a developing need for the government to give the growing sector of private business, upon which everything hangs, a boost. The BCC wants it to be easier to employ people, especially for small firms. This is right. It sounds reactionary to suggest that it should be much cheaper to hire (and lay off) employees and for them to work in a less regulated and simpler framework. This is especially important when jobs may be part time initially and workers may have more than one employer.

There must remain protection from ruthless exploiters among employers and these do exist, though nowadays most employers want to do right by their workers. There are skills gaps and the Education Secretary needs to redouble his efforts to bring young people to the conclusion of their eduction with useful knowledge and skills, rather than the useless litany of high grade passes in meaningless subjects, which crowned the Blair ambition of Eduction, Education, Education.

Nothing would do more to spur economic growth than the reform of the income tax system to a single rate, long promoted by this blog and in my book. This would allow the high threshold of £ 15000 pa, before any individual pays income tax, providing not only incentives to work but simplicity of employment. The inability of modern governments to really get to grips with the important reforms to sharpen up the whole performance of UK Ltd, whilst at the same time fooling about with faddish changes which make no difference, is one of the outcomes of the modern politician having done nothing but politics before taking high, even the highest, office.