With ASKAR SHEIBANI,
CEO, Comtek Network System and chair, the DBF
According to the Office for National Statics (ONS), UK inflation is skyrocketing. The price of necessities such as food, energy, petrol, mortgages, rent and many other items or services that are essential for the lives of ordinary people, is increasing daily.
Small businesses are the victim of the country's economic mismanagement. They cannot increase their prices when supplying goods to large businesses or the public sector. They undertook huge debts during the pandemic whilst hoping things would get better.
Shortages of skilled people and an increase in the cost of employment are also hammering them. Owners of small businesses have no choice but to undertake personal guarantees when borrowing money from banks. When they lose their businesses, they lose their livelihoods too.
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The big question is, could this economic crisis have been avoided, at least partially? I believe we would have been in a much better place if the country was run by competent leadership.
The UK government poured away billions of taxpayers' money and took the country out of the European Union, promising the nation better trade deals all over the world. They promised cheaper food prices and a reduction in VAT. They promised that our farmers and fishermen would fare much better, and that the NHS would get an extra £350million a week. Most of us believed them and said "let's go for it".
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Now we are witnessing the reality and it is a far cry from what was promised. We have seen hardly any transformative trade deals. The NHS and social care are starved of cash and staff. We cannot find doctors or nurses to employ, and our health service is at breaking point. Food prices are going up and there has been no reduction in the VAT rate. We cannot continue to blame all the mismanagement on global challenges.
In addition to all of this, the war between Ukraine and Russia is proving to be the most devastating war since the First and Second World Wars.
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It has brought misery to people all over the world, including in Russia. I believe this war has been created by warmongering world leaders. This war could have been avoided if all sensible leaders of the nations had sat around the table and produce a solution which would have been acceptable to all.
Now our egotistical leaders are enjoying being seen on the world stage, pouring away billions of pounds of public money that we weren't supposed to have and plunging the country into further economic uncertainty and crises. This is a disastrous war and could easily spread into other parts of the world. My plea to our government is to work with other nations to come up with a compromise deal.
Public trust in the country's leadership has evaporated. The UK government has gone into paralysis and is unable to deal with this spiralling domestic economic uncertainty. The government must implement the following to ease the pressure on small businesses and low-income citizens.
1 Radically reduce the VAT rate.
2 Scrap or suspend the increased element of the NI tax on businesses.
3 Suspend all the coronavirus-related loan repayment for a further two years.
4 Reduce the duty rate on petrol by the extra amount that the government is benefiting from because of the price increase.
5 Radically simplify the work permit applications and approvals for EU citizens.
6 Allow skilled asylum seekers to work while waiting for the determination of their applications.
7 Scrap or suspend the servicing of statutory demands which leads to the unnecessary destruction of small businesses.
The above are just a few recommendations that will reduce inflation and the pressure on small businesses and poorer citizens.
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