Presidents Message
Mr Bro McFerran CBE
President of the Northern Ireland Chamber of Commerce
Tackle the £66 billion burden inhibiting business
According to the latest Burdens Barometer from the British Chambers of Commerce, the cumulative cost of regulation on business throughout the UK since 1998 has now reached a staggering £66 billion. £66 BILLION! This is an extraordinary figure that clearly impacts the competitiveness of companies of all sizes and across every business sector.
Government is now proposing, once again, to address the ‘red tape’ inhibiting business growth by allocating departments a ‘regulatory budget’ designed to limit the amount of new legislation they can introduce. How many times have we heard pledges from ministers to tackle bureaucracy? The goal this time is to cut the burden on business by 25 percent by 2010. It could, and should, go further and faster but probably will not.
Interestingly, the need for far-reaching measures to strip away bureaucratic regulations to enable existing businesses to grow faster, and also to encourage entrepreneurship, is a feature in a new ‘manifesto’ for business shaped by Julie Meyer, the co-founder of the First Tuesday networking club. Meyer has produced 16 recommendations including a sharp reduction in government involvement, cuts in regulations, lower taxes and easier access to finance. Funding business ideas is probably more difficult now than ever as a result of the global credit crunch on banks, now entering its second year and likely to continue well into 2009.
Meyer urges a greater focus on how entrepreneurs can drive the economy forward. Many people, of course, will support the theme underpinning her document, that entrepreneurs and enterprising businesses are the lifeblood of the economy. Capitalism, the manifesto argues, is an unstoppable force around the world, and individual capitalism is the force that will shape the 21st century.
However, recent research shows that the entrepreneurs likely to make the greatest long-term impact on a developed economy tend to be innovators in ICT and life sciences. And few, if any, one-man-band start-ups are likely to have a huge impact.
Accelerating the growth of entrepreneurship is a key platform of the strategies of the Northern Ireland Executive, the Department for Enterprise, Trade and Investment and Invest NI. Entrepreneurs, those who start their own businesses and those who drive established companies, create intellectual and financial wealth through which society benefits and moves forward on most fronts. It seems reasonable then that those who take risks, especially through innovation in high-value sectors, should be able to reap reasonable rewards.
Our taxation system is arguably among the world’s most complicated and onerous. Recently, the CBI weighed in to brand corporation tax as “too burdensome, too complex and too changeable to provide the right environment for British businesses”. It’s a view held by the chamber for some considerable time.
The Executive, of course, made a very strong case and lobbied hard for a substantial cut in corporation tax as a way to kick-start the local economy. Regrettably it failed to persuade the UK Treasury to take the action demanded.
The Executive may have lost a battle but there’s a war still to be won. It should maintain the pressure on government for a cut. It should also look at other steps that it can take to promote entrepreneurship including, for example, bringing the long-promised streamlining of the planning system forward faster and ensuring that small and medium-sized enterprises are given a fair chance of winning worthwhile public procurement contracts. It should also heed calls from local business to bring forward strategic investment projects. Such action would help to stimulate the local economy, maintain employment and assist innovation and entrepreneurial activity.
