How to wreck Small Business

Hello Mark

Perusing the economics commentaries in the business pages this Sunday morning: The lack of growth in employment is clearly the principal concern of the powers-that-be on both sides of the Atlantic. Yet having personally seen the clear correllation between excessive taxation and job destruction, I find it difficult to understand why this obvious truth (obvious to me, anyway) is so difficult for our politicians to understand.

The first (and best) example of this was demonstrated by the introduction of 15% VAT overnight on home improvements in 1985. I had an innovative product with growing sales, a factory, a growing workforce, and export potential. Had the status-quo been maintained, the Exchequer would have received growing income from steadily increasing income tax, corporation tax, and property rates (and also from the rents from my local authority landlord) along with reducing welfare payments from those new employees coming off the dole. In the event the overnight bombshell of VAT killed the business stone-dead. In April I had a full and growing order book but took not a single new order between then and August, when I sacked the remaining staff and changed the direction of the business with a dramatic downsizing (to just me, again). It was four years before the payroll reached the same level, but sales of the innovative product range were damaged for a generation by the inability to grasp the moment in 1985. Such is the damage wrought by the greed of big government.

Regards

Keith

PS And that was a Tory government!