The next government shouldn’t put economic recovery at risk, says Richard Merrin, managing director of Spreckley Partners, in the third of our pre-election blogs
It is often said that the marketing sector is the first to feel the icy blast of a recession. Never was this truer than in the years since 2008. Marketing spend – especially in the areas of PR and advertising – was seen as discretionary when times got tough.
But now, something extraordinary is happening. There is an uplift in spend and it’s not just a gentle increase; it’s a tsunami. It isn’t even the larger or international corporations that are opening their wallets; we are experiencing a dramatic improvement in confidence in the market, which can only mean one thing: we’re seeing investment for growth.
Inflation is at rock bottom and combined with historically low interest rates, business confidence is on a high. Small businesses as a whole are playing a key role in the economic recovery. There are some 4.9 million of us, which is a political force none of the parties can afford to ignore.
To the next government, I say just do us a favour: be true to what you promise and cut red tape. The prime minister promised a bonfire of the regulation vanities back in 2010. To date, only 800 rules and regulations have gone and I’m not even sure what they were. Credit where it’s due however, as David Cameron has been the first prime minister in history to actually reduce regulation rather than pile it on.
Benign economic conditions should of course be paramount for the next government. Now is not the time to make a dramatic lurch one way or the other in terms of macroeconomic policy; even the IMF has said we’re on the right track. I am watching the antics of the smaller parties closely and the anti-austerity triplets of Labour, the Greens and the SNP have pledged to review the current tax regime. We have one of the lowest levels of corporation tax in the developed world and that is making a huge difference to businesses, no matter what size.
These parties are anxious to increase what they call ‘investment’ and what I would call government spending. This means one thing: tax. It is the elephant in the room for many business owners, who for too long have been seen as cows to be milked by the state.
There are too many pledges to review business rates, increase national insurance and income tax. Despite the evidence that lower tax raises more money, Labour will see income tax increase to 50% and the Greens will increase it to 60%. This is nothing short of entrepreneur bashing.
Some hugely important changes have taken place under the watch of the coalition: no-fault dismissal has been reverted back to two years and state support for employment tribunals has been dramatically reduced, resulting in a 75% fall in cases. This shouldn't be reversed come May.
And there is one other thing we could all do with: superfast broadband. Sort it out and sort it out now.
Richard Merrin is managing director of Spreckley Partners, the PR agency, and a former Conservative Party candidate for Hornsey and Wood Green.