|
The ability of the UK's smaller manufacturers to help re-balance the economy is being put at risk because many are finding it difficult to promote their products in new and emerging markets.
A study by the Forum of Private Business (FPB) found that 26.2 per cent of respondents to the survey cited problems in reaching emerging markets as their top concern, above operations management (18.7 per cent), human resources issues (13.4 per cent) and new product development (12.1 per cent). As a consequence, many smaller manufacturers consider that they need to amend their business and marketing strategies immediately (28 per cent) or within six months (23 per cent), compared with those willing to delay changes until later in the year (7 per cent) or the longer-term (13 per cent). However, most firms said that they required more support and guidance when it comes to breaking into new markets. In all, three-quarters of the smaller manufacturers surveyed think they will need help on sales and marketing in the coming six months, but almost one third (31 per cent) claimed that the necessary advice is not available to them. Phil Orford, the FPB's chief executive, commented: "Smaller manufacturing businesses should be able to be more flexible than their larger competitors and can move into new and emerging markets more quickly as the economy recovers - but this is not going to happen by itself. Producing a sales and marketing strategy should be a top priority, not an afterthought. "Customers are highly unlikely to seek out your services under their own steam so it is important that smaller manufacturing firms embrace all of the options that are available to get their message out there." Elsewhere in the survey, just 20 per cent of firms said they believe 2011 will be easier for their businesses, compared with the 61 per cent who fear it will be even tougher. However, one in ten are beginning to see an increase in new orders, with one in four saying they expect to do so within six months. Some 36 per cent expect to see a surge in orders in the 'longer term'. Subsequently, only 6 per cent of respondents are looking to recruit staff at the present time; this contrasts with the 41 per cent that believe they will be creating new jobs only beyond the coming year.
0 Comments
Tax hikes will be needed to sustain the expected levels of future pension payments and benefits, a leading think-tank has said.
According to a report from the National Institute of Economic and Social Research (NIESR), people aged over 65 will get £220,000 more from the state than they would have contributed over the course of their lives. However, a new born child now will probably pay a net £159,000 more in taxes and contributions than they will receive in return from the state in benefits and services. The effect will be to create a multi-trillion pound commitment that must be met by future generations. But closing that tax and pensions gap could cost as much as between £80 billion and £90 billion a year in additional taxes, the NIESR warned. The estimated shortfall in public funds is primarily driven by pressures on health and pension spending, the NIESR said, rather than by rises in government debt. So tax increases amounting to 6 per cent GDP may be needed in the future if the country is to avoid a serious diminution in services. That is the equivalent of 16 per cent of total current tax receipts. The report said: "There is a past history of pay-as-you-go benefits which has allowed earlier generations to receive more from the state than they have contributed over their lifetimes, and it is inevitable that there is now a net contribution which has to be paid. The Budget must contain the promise of tax cuts if the UK is to escape the perception that it is a high tax economy.
That was the eve-of-Budget message from the Institute of Directors (IoD). The business organisation argued that the Budget must set out four fundamental changes to the tax system. It claimed that the proposals involve either little or no cost over the course of the current spending review or more significant cost beyond 2014-15. The IoD is pushing for an abolition of the top 50 per cent income tax rate, which covers earnings over £150,000 a year, by 2015. While the current economic situation means that dropping the rate immediately would be difficult, signaling its eventual demise would raise business confidence, the IoD said. Also on the personal tax front, the IoD called for an end to the withdrawal of the personal tax allowance on earnings above £100,000. To encourage business, the Chancellor should commit the Government to reducing corporation tax to 15 per cent by 2020. This would give the UK the lowest corporate tax rate in the world. Cutting the corporation tax rate from 24 per cent (to which it is due to fall) to 15 per cent would cost around £9 billion per annum. However, the IoD said, this would be funded by continued restraint in public spending growth and the simplification of certain allowances, together with the impact on GDP growth from greater business investment in the UK. The fourth area identified by the IoD is an exemption from future capital gains tax for entrepreneurial investments. Under the IoD proposals, anyone subscribing for shares in a new company starting between now and 5 April 2012 would be exempt from capital gains tax when they sell those shares. This, the IoD added, would encourage the injection of fresh equity capital into businesses. Miles Templeman, the IoD' s director-general, commented: "Since there is little money in the Treasury's coffers many people are assuming that there's not much George Osborne can do to kick-start economic activity and strengthen the recovery in the Budget. They couldn't be more wrong. Now is the time for the Government to signal in the strongest possible terms its determination to make the UK one of the most tax competitive countries in the world. "The Chancellor can send this signal by announcing in the Budget that the 50 per cent income tax rate will be abolished by 2014-15, and corporation tax will be reduced to 15 per cent by 2020. This is one of the most dynamic areas of the tax system where deep cuts in rates could transform business behaviour and raise more revenue in the long term. "This has the potential to boost business confidence and increase inward investment into the UK. We can't afford to make all these tax changes today, but signalling tax cuts for tomorrow could still boost business confidence." |
|
RSS Feed