27/01/12 - Swindon Advertiser Weekly Article

The economy has dominated the news this week.  The latest preliminary estimates, whilst showing growth of 0.9% in 2011, also showed a 0.2% fall in the final three months of last year.  The UK economy is facing a number of key challenges.

Firstly, any attempts to increase public spending or cut taxes to stimulate economic growth are hampered by the record deficit.  Our national debt has reached one trillion pounds, showing the unsustainable levels of spending built up by the Labour Government.  They wrongly thought they had ended ‘boom and bust’ and went on a massive spending spree, costing us £120 million per day in debt interest - more than we spend on our education and defence budgets.  Thankfully our decisive action to tackle the deficit is working, and borrowing is more than £11 billion lower than in the same period last year.  This is protecting our economy and keeping the cost of the deficit and household mortgages down.   Secondly, the ongoing crisis in the Eurozone has a significant impact on our economy.  Whilst fortunately we are outside of the Euro itself, it impacts on our economy because a large percentage of our trade is with the EU.   Thirdly, inflation has also been a crucial factor, eating into household budgets with rising costs in fuel, food and utilities.  Fortunately that pressure is now easing with inflation falling back, predicted to return to 2% by the end of the year.

Despite these challenges, the International Monetary Fund has predicted that the UK economy will grow by 0.6% in 2012, whilst Germany will grow 0.3% and France by 0.2%.  We’ve supported growth by cutting corporation tax, scrapping Labour’s job tax, introducing enterprise zones, investing record sums in apprenticeships, increasing pensions, freezing Council Tax and protecting mortgages.  For me, the priority as the economy recovers is for the government to target support for new start-up businesses, which will help to create new private sector jobs.  We should also aim to increase income tax allowances to take poorer people out of paying tax altogether.

Building on the support for new businesses, this week the Prime Minister announced a major new campaign to highlight the support available to start-ups and smaller companies.  Working closely with the private sector, the ‘Business in You’ campaign aims to inspire people to realise their business dreams and ambitions.  It is vital that we make people aware of the support that is out there and encourage them to turn their ideas into a reality.  Further information can be found online at: www.businessinyou.bis.gov.uk

Small businesses and entrepreneurs are the lifeblood of our economy, and hopefully this campaign will inspire people to take the leap and start their own business.