ePolitix stakeholders comment on the business and skills aspect of the 2005 Budget.
Stakeholder Response: Forum of Private Business
Nick Goulding, FPB chief executive, said: "There is little in the budget to encourage individuals to take the giant leap and risk of establishing a business. In particular, women and other under - represented groups such as ethic minorities and those in inner cities who deserve and need more meaningful support.
"Small businesses are resolutely opposed to continued rises in the minimum wage, which have seen it increase by 34.7 per cent in five years and become a major issue of concern to the small business sector.
"Business owners are crying out for pupils and graduates to have relevant skills to the workplace. The FPB has been campaigning hard to see more cash for employers to help work based training.
"The extension of the employer work place training pilot to is welcome but again FPB would demand greater investment in vocational training – delivered in the workplace. The £2000 return to work bonus for lone parents will help small businesses in recruiting mature and able staff.
"Maternity leave will be greeted with a sense of utter dread by employers. Maternity leave creates massive operational and organisational headaches for small firms. Increasing paid maternity leave to a whole year is unwise and will only aggravate the problems small firms already face.
"With regard to the Hampton Review and Arculus recommendations the reduction of inspection bodies from 35 to nine will be wholly welcomed by small firms who have been confused by the monstrous bureaucracy of regulations.
"The government is right to identify the onerous burden of continuous and unnecessary inspections on small firms. The food industry in particular should benefit from a having to deal with fewer regulatory bodies.
"With regards to gold plating, the UK civil service has to change the way it implements EU law. The present method is fundamentally flawed. The chancellor must deliver on this promise. As ever the devil is in the detail and small businesses will want to see less complex legislation as a matter of urgency."
Stakeholder Response: British Retail Consortium
Kevin Hawkins, BRC director general, said: "The BRC welcomes the chancellor's recognition that both low inflation and low interest rates are the key to stability in the UK economy and retailers are relieved that Gordon Brown has done nothing to further weaken consumer confidence. His actions may even have a positive impact on confidence.
"The BRC welcomes the governments commitment to the recommendations set out by the Better Regulation Task Force and the Hampton review. The 'less is more' principle is a sensible one when it comes to unnecessary regulation.
"The BRC has campaigned hard to reduce the burden of regulation and for more consistent enforcement targeted towards rogue traders. Whilst we support the proposals, everything will depend on whether they are fully and wholeheartedly implemented. They must not be left on a shelf to gather dust.
"The great flexibility offered and change-accommodating attitude makes the retail sector very attractive, especially to women. Flexibility is important in any workplace but it is equally important that this comes at a realistic and workable price, especially to those smaller retailers that find it more difficult to absorb additional costs.
"The differences between small and large retailers in terms of company policies can be significant and a raft of new employment legislations will always prove more of a challenge for smaller retailers.
"The BRC are pleased the LPC has taken our evidence into account and only recommended an increase of four per cent to the NMW. Whilst this is still an above inflation increase, retailers will be relieved as the two consecutive increases of seven to eight per cent(October 2003/4) are proving very difficult for both larger and smaller retailers to absorb in today’s trading conditions.
"Retail sales growth is slow and the current economic climate is generally uncertain. Ill thought out decisions on the minimum wage hit every business hard and we are therefore concerned that the LPC has recommended an increase of six per cent to £5.35 for October 2006.
"The LPC’s recommendations for this October reflect the BRC’s concern about the continued impact of the NMW on pay differentials and the chairman of the Commission has admitted that they do not yet have enough data from the ONS which would enable them to make a final
assessment. We therefore urge the Commission to review the recommendation for October 2006 as and when further data is available and in the light of the state of the economy later this year."
Stakeholder Response: Institute of Directors
Miles Templeman, IoD director general, said: "The better regulation proposals are a serious attempt by the government to address the concerns of business facing the rising tide of regulation. The IoD supports the government's endorsement of the Hampton Review and the Better Regulation Task Force report. If the government manages to implement these proposals, business will be very happy. The key is implementation and seeing fine words translated into action.
"The government should publish an annual review of exactly which regulations have been removed and by how much the cost of red tape has been reduced. Business involvement in the de-regulation process is fundamental to its success.
"The IoD will establish its own regulatory task force to help identify specific regulations which require revision or removal.
"On education we welcome the expansion of the employer training pilots as a means to improving skills and we also welcome the government's desire to get more people in education and training up to eighteen.
"However, we still have a long way to go in increasing the participation rates in education and training post-16 and improving basic numeracy and literacy in our schools.
"The IoD supports the plans to simplify small business accounts with the Inland Revenue but the devil will be in the detail.
"The chancellor's appointment of George Cox to examine the UK's industrial competitiveness was welcomed and the IoD will contribute fully to his study."
Stakeholder Response: Federation of Small Businesses
Carol Undy, FSB national chairman, said: "The Hampton report is encouraging. There are currently over 300 different kinds of inspections carrying a right of entry into business premises and the whole army of inspectors desperately needs to be rationalised.
"Every single inspection interrupts day-to-day business. Hardworking business owners must be able to concentrate on what they are good at - job creation and wealth generation. We urged Philip Hampton to work towards a single general-purpose inspector. His recommendation to merge 35 inspectorates into nine is an important start.
"Businesses have been promised bonfires of red tape in the past and they have never been ignited.
"The Better Regulation Taskforce report is certainly radical. A more systematic assessment of the administrative cost of regulation should replace the assumptions that are made at present. A 'one-in-one-out' approach may bring about a much needed cultural change within the civil service and a commitment to tackle “gold plating” is welcome.
"But whether or not the report will result in 'fundamental change' and 'a red tape revolution' awaits to be seen. Businesses are cynical because of past broken promises - 30 reports, seven white papers and two acts of parliament during the last 20 years alone.
"At the 2004 budget, the chancellor said that he accepted the case for the Inland Revenue paying the working tax credit directly to claimants. It was about time he announced the timetable for this change, and employers and employees alike will welcome the introduction of direct payment from November 2005.
"Hardworking business owners will welcome the introduction of a range of flexible payment options for tax bills and we call for them to be implemented immediately."
Stakeholder Response: NESTA
Jeremy Newton, chief executive of the National Endowment for Science, Technology and the Arts, said: "We welcome the chancellor's review into how Britain's creative industries can help the manufacturing sector.
"However, recent research commissioned by NESTA emphasises that action is needed to support the creative industries themselves if they are to be in a position to help underperforming sectors.
"Creative businesses are a UK strength, and the chancellor is right to be concerned that this expertise is being neglected by other business sectors. NESTA is committed to making sure that this does not happen through working as a catalyst for change for the sector and supporting start up creative businesses.
"Connecting the creative industries to other business sectors - such as manufacturing - rather than viewing the creative process as an isolated, high risk activity is one of the recommendations raised in our latest research into investing in the UK's creative industries.
"However, for creative businesses to be in a position to help manufacturing they need to be properly supported through private investment, sadly this is not the case at present and we risk another UK strength becoming a sector in decline.
"Creating value - How the UK can invest in new creative businesses is published by NESTA on 26 April. It examines the economic, social and cultural importance of the sector to the UK and investigates what can be done to further improve investment in the sector."
Stakeholder Response: Association of Chartered and Certified Accountants
Glenn Collins, ACCA head of business advisory services, said: "Nearly half of the 20 issues ACCA identified as requiring government action to help SMEs and general taxpayers could have been directly actioned by the chancellor today.
"But there were only minimal steps taken on stamp duty and inheritance tax, while other crucial areas were left completely untouched. He has not put small businesses first.
"On the positive side, the chancellor's commitment to improving business education for 16 to 18-year-olds should be a welcome boost to reviving entrepreneurial spirit in the UK.
"While we support the chancellor's incentives for small businesses to use a simplified flat-rate VAT regime, and having a single point of contact within the tax authorities for SMEs, the underlying burden of compliance still rests on the shoulders of small
"The proposal that the regional development agencies will develop and deliver focused coaching for new and existing businesses with high-growth prospects is encouraging - but until now the RDAs have not always engaged sufficiently with the private sector. They must not work in isolation, or this initiative will not succeed.
"ACCA welcomes the move to merge government agencies with watchdog briefs over business from 35 to nine, as fragmentation of the UK public sector over the last 25 years has failed to make best use of resources. But it should be noted that the benefits of re-organisation will come in the longer term, as the initial costs of the change process will be substantial.
"To complement and accelerate this process, ACCA urges the chancellor to proactively encourage the extended use of shared services throughout central and local government. Research that ACCA has conducted in this area confirms the cost effectiveness of this approach.
"It should not be the case, for example, that the hundreds of government agencies in the UK currently have different IT systems. The UK should follow the example set by those countries which are implementing integrated financial management throughout government."
Stakeholder Response: Which?
Graham Vidler, head of policy at Which?, said: "Regulation works best when it meets the needs of both consumers and business. The government has unveiled an impressive package to streamline regulation and cut costs for business, but it’s important that we don't lose sight of the fundamental purpose of regulation - protecting consumers.
"On the whole, it looks like good news for consumers. But Which? will be on the government’s case to make sure that the Chancellor’s move to reduce the cost of regulation does not undo the progress made in consumer protection over the years."
Stakeholder Response: Institute of Chartered Accountants England and Wales
Eric Anstee ICAEW’s chief executive, said: "A radical reduction in red tape is long overdue, as this contributes to stifling the growth of SMEs. However, scrapping the odd regulation here and there will not satisfy business. What is needed is a systematic overhaul of unnecessary red tape to truly free businesses from the straitjacket they find themselves in. The Hampton review and the Arculus report are only a beginning and plenty still needs to be done."
Clive Lewis, head of SME Issues at the ICAEW, said: "We welcome the Hampton review. It makes sense to reduce the number of regulators that businesses have to deal with by merging 31 national regulators into seven. But the Treasury must ensure that the Review will result in more user-friendly regulators and not bureaucratic super-regulators. This is the last thing that SMEs need. Furthermore consumers and employers, the targets of the regulation, need to feel the benefits of the new regulatory structure.
"We also welcome the principle of risk assessment throughout the regulatory system. Local authorities have responsibilities for local regulation for inspection and enforcement. With around 500 local authorities in the UK, the issue is how to raise standards and achieve a uniform level of delivery across all of them. How will 500 local authorities apply the risk assessment principles?”
Stakeholder Response: National Farmer's Union
A spokesman for the NFU said: "The NFU welcome Mr Brown's commitment to lessen the burden of regulation on business and hopes the streamlining of agricultural inspection bodies will reduce the level of red tape being inflicted on the industry. However, the true test of this move will come in the field and we look forward to seeing how the new structure will operate. The NFU believe the agricultural industry is well placed for the adoption of the risk based inspection system highlighted in the Chancellor's speech.
"The announcement that there will be five inspection bodies (covering: food safety, the countryside, agriculture, animal health and environmental protection) in place of the current twenty-two should be positive as long as it does lead to reduced regulation and red tape. The NFU believe that this process needs to be thoroughly thought through and the new agencies area a logical fit. This can be achieved through consultation with stakeholders and should not be a numbers game to reduce headline public figures."
Stakeholder Response: Construction Products Association
Michael Ankers, chief executive said: "In a separate response to the Hampton Review and the report of the Better Regulation Task Force, the Association welcomed both reports. In particular, the proposal that the government should adopt the successful Dutch approach to reducing regulation and introduce a ‘one in one out approach’, were both seen as positive steps in helping to remove the regulatory burden on business."
Stakeholder Response: CITB -Construction Skills
Sheila Hoile CITB-ConstructionSkills skills strategy director, said: "We welcome the Chancellor's commitment to revitalise vocational training, especially apprenticeships.
"The UK's construction industry needs high quality school leavers as entrants to its workforce, with effective and rewarding training programmes and apprenticeships for them to join.
"The extra apprenticeship places and the idea of a negotiated learning agreement for 16-17 year olds are both welcome initiatives. CITB-ConstructionSkills will work, where possible, with government to make these pilots a reality.
"However, no matter how much skills are taught, you need practice to master them * and that is where the role of the employer is vital.
"CITB-ConstructionSkills will work with Government to ensure that employers in our industry are at the core of the new initiatives and the overall drive to make the commitment to vocational education a success in practice, rather than just words on paper.
"We have to get this right. Without it the new building programme for primary schools announced today just won't be possible * we need the teenagers of today to be equipped with core construction skills to be able to help build the primary schools of tomorrow."
Stakeholder Response: Learning and Skills Council
Mark Haysom, chief executive of the Learning and Skills Council, said: "We are delighted that the Chancellor has again put the LSC at the heart of improving the skills of all young people and adults, which will have a significant impact on the productivity of the nation.
"I am particularly delighted with the ongoing endorsement from the Chancellor of our work to date on Employer Training Pilots (ETP), and with his support for investment in the further education estate.
"The Employer Training Pilot is just one of our programmes, which we have been running across England, to meet the needs of employers. The additional £65 m Gordon Brown has announced will enable effective transition into a national programme.
"The additional funding for renovation and renewal of the further education estate is essential if we are to have a system that is capable of giving people and employers the skills the country needs for the future."
