Awkward times ahead for the chancellor
Posted on the Daily Telegraph Blog by Richard Tyler, Nov 2007
Dawn Gibbins used to call the Department for Trade and Industry the “Dare to Inspire” department. She’s not quite sure what to call the DTI’s replacement, the Department for Business, Enterprise and Regulatory Reform – but it’s certainly not as complimentary.
For the more resolute skeptics out there who remember this newspaper’s considerable caution over the DTI’s track record, it should be said that Ms Gibbins is one optimistic lady.
Who would have thought she could build a successful building materials business in what is still considered a man’s world. But that is what she has done.
Cheshire-based Flowcrete Group now operates globally. It aims to sell £40m worth of its specialised flooring products by 2010.
Ms Gibbins is exactly the sort of business person that the Government wants to be seen to champion.
The Department for Business (Dberr) under Secretary of State John Hutton has set out a new strategy that is designed to encourage more small businesses to grow like Flowcrete. The expansion of women-owned enterprises, which have ballooned in number in recent years, is a particular priority.
However, Ms Gibbins is no longer the fan that she once was. Gone are the old DTI’s grants for new product development, called the SMART awards, which helped Flowcrete to grow in its early days. She is still an ardent supporter of the Dberr-funded Manufacturing Advisory Service, which she says has saved her own Cheshire-based business millions.
But the Chancellor’s decision to raise the capital gains tax rate by 80pc leaves her concerned. “It’s awful,” she says, before hinting that business tax rises make Britain less competitive. “We have businesses all over the world and offices in 26 countries. The future for my business is there – we could float in Hong Kong, Malaysia, whereever,” she says.
Ms Gibbins is a celebrated enterpreneur, business builder, job and wealth creator. And she’s not from London.
The capital gains tax rise hits at the heart of the Government’s moves to create a more entrepreneurial culture in Britain. Gordon Brown wanted to encourage entrepreneurial activity so he used taxpayers’ money to reward risk-taking by lowering the tax paid on the sale of any successful business venture.
Now Alistair Darling wants to reverse this, charging business owners and their investors more and lowering the rates for outside shareholders and buy-to-let landlords. He says his predecessor’s tax policies were neither “simple” nor “sustainable”.
Next week, ministers from both Dberr and the Treasury will attach themselves to the thousands of events taking place around the country that are designed to encourage more young people to have the confidence to be more entrepreneurial.
This “Enterprise Week” was a firm favourite of the last Chancellor, just as the tax breaks he put in place as a statement of Government support for entrepreneurs were also his idea. Alistair Darling will face an awkward few days.
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