A couple of months ago, the Budget was targeted at Makers, Doers and Shakers and has been applauded in some quarters of achieving just that. With Bradford’s aspiration of being a Producer City and with a diverse business district that is full of makers, doers and shakers it would appear to be targeted at cities like ours.
Let’s just stress-test the pre-election positivity against the local impact and try to see where the wealth and job creation are going to come from and how that may affect productivity and margin.
1. Extension of the annual investment allowance with a doubling to £500K by 2015 will certainly give confidence to growing mid-sized companies; confidence to invest, provided they’ve got funds or can get cash from a variety of sources. A big question here, but certainly jobs and wealth creation could flow from increased investment that will improve margins over time.
2. More support for exporters is critical as the regional economy tries to rebalance. Export finance is a real barrier and moves to level the playing field with our global competitors is a step in the right direction. Access to international markets remains a goal too far for many, but those ambitious enough to seek out business support will find help at hand. Those brave enough to tread in the shoes of exporters should see job and wealth creation start to materialise as the rebalance takes shape; any improvement in margins, however, may be down the line as return on investment is a long game.
3. An extension of the Apprenticeship Grant for Employers (for fewer than 50 staff) allows more companies to recruit 16 – 24 years olds providing they can find people with the right skills and attitudes. Recent studies locally suggest that the problem is with supply of young people available for jobs to meet the demand, which seems crazy with mass youth unemployment. Either way the extension of the grant is welcome and will, over time, lead to more jobs and hopefully increased wealth if the mix and match of skills can be made to work. Our business soon found that the return on investment of apprentices is very quick, providing the right match can be made.
Playing mind games
So the conclusion seems to be that, in regional towns and cities like Bradford, a Budget for jobs and growth has been created. The real question in my mind, however, remains about productivity, pay rises and margin. Do you agree?
Will these measures improve the dismal productivity gap that exists in the UK compared to our international competitors? With pressure on above inflation pay rises mounting, will that further delay the return to decent margins that have eluded many for so long, or just make the UK less competitive and productive in years to come?