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Stephen Caddick

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George, We Need a Budget for Growth

Posted: 19/03/2012 11:45

Abolishing the 50p tax rate, a mansion tax, slashing fuel duty - speculation has been rife in the last few weeks on the surprises which might be in this year's Budget. Undoubtedly these are all important changes which will affect people quite significantly, if enacted. Yet behind the headlines and the gimmicks, this needs to be a Budget that gets the British economy moving again. So just like millions of others, I'll be watching closely on Wednesday to see if it will do just that.

There's a whole host of ways that George Osborne could do this. He could provide generous tax breaks for spin-outs. He could tackle the issue of VAT - currently there are all sorts of rules about businesses working in university premises which make it prohibitively expensive to physically work closer together.

But if we are to kick start the economy we really need to think much bigger.

Osborne has shown he's capable of that by taking the long-view when it comes to tackling Britain's debt mountain with his plan to offer 100-year government bonds - so what about a similar bond for growth? It could be used to fund a whole range of projects - low-cost loans for entrepreneurs, infrastructure projects and tax-cuts to encourage inward investment. These would kick-start growth.

Even if Osborne does not have the appetite for a Growth Bond, we must find the financial capital to stimulate and support sustainable growth. We must give every first time businessman or woman a shot at launching a new business, and need to create more support packages to do it.

We also need to support the so-called mid-caps - medium-sized companies which provide the best immediate prospect for jobs and growth in the short-term. Devising some taxation incentives to make it easier for them to grow faster would be a good start, along with a relaxation on National Insurance and corporation tax for these companies.

Some hefty tax incentives to stimulate overseas companies to come to the UK would be welcome, too; a five-year package of measures to encourage large companies to come to our shores would create jobs and growth for the benefit of us all.

Of course, for those of us in universities our most immediate concern is for our students. Tens of thousands across the country are graduating this year into the toughest job market for a generation.

We need a national student entrepreneur loan fund, providing low-cost loans for students chomping at the bit to start their own business - and with the job market the way it is, their numbers are growing every year.

Wednesday is George Osborne's opportunity to really get the British economy motoring once again, rather than injecting a few turbo-charges which will make a lot of noise but have little tangible long-term effect. We need a Budget which will enable those who want to create wealth to do so, and those already doing so to create more of it; a Budget that will safeguard the future of our young people, already more perilous than for many years, and to improve their employability and skills. It will be interesting to see which approach the chancellor chooses.