An award-winning entrepreneur has urged Alistair Darling to use measures in his Budget to take the brakes off bank lending.
Richard Harpin, Ernst & Young United Kingdom Entrepreneur Of The Year, says access to borrowing is key to coping in the recession and believes the Chancellor should announce measures to encourage banks to lend in today’s speech.
Mr Harpin, chief executive of domestic emergency insurance business Homeserve, said: “As a country, we have still not fully tackled the biggest problem facing the economy, which is access to finance.
“This affects all areas, from large business to small companies and domestic mortgage borrowers. Bringing interest rates down to an all-time low is all well and good, but it’s irrelevant if people can’t get finance. There is much work yet to be done with the banks to make sure lending is available.”
Mr Harpin won the Entrepreneur Of The Year title after guiding Homeserve to a turnover of £555 million and operating profits of £91 million last year, up 29 per cent on 2007.
The Walsall-based firm supplies emergency insurance and repairs to more than 1.4 million households every year.
Mr Harpin has called on the Government to reform the corporate tax structure to prevent United Kingdom businesses from moving to more business-friendly tax jurisdictions overseas.
He would also like the Chancellor to help other young entrepreneurs, who he regards as the creative force of the UK economy, with better access to start-up finance.
He said: “We don’t have a level playing field with some other countries in Europe and this is bad news.
“We have already seen companies relocate their head offices overseas, partly as a result of the UK’s corporate tax system. The Chancellor would be well-advised to create a more business-friendly tax environment.
“It’s really important to encourage people to start their own businesses, even in the downturn,” he continued. “This will ultimately create wealth and jobs. The biggest barrier to getting a business off the ground is start-up finance, which has pretty much dried up. The chancellor should do more to encourage its availability.”
As an Apprentice Ambassador, Mr Harpin is keen to see the Government take positive steps to boost the number of apprenticeship vacancies as a way of closing the skills gap in British industry. “Ten years ago, there were 59,000 formal apprenticeships in this country; now, there are more than 190,000,” he said.
“The aim of the Apprentice Ambassadors Network is to push this to well over 200,000 in 2009 and we value government help in achieving this,” he said.
“We have been encouraging youngsters to go into higher education but some people are bright without being academically inclined and many would fare better outside a university environment. At Homeserve, we are really committed to recruiting and training a growing number of apprentices.”
Chris Sharpley, partner and head of tax at Ernst & Young in Birmingham, said: “Entrepreneurial companies are in need of measures that will help them to retain and recruit employees, such as a reduction in national insurance contributions.
“Learning from previous recessions, businesses will need to be resourced and ready for the upturn to capitalise on opportunities. Tax relief, encouraging entrepreneurs to invest despite adverse conditions, will be welcomed. The Chancellor could extend capital allowances or reconsider the abolition of industrial building allowances, which has hit West Midlands manufacturers hard.
“Overall, the business community would benefit from announcements that give consumers a real incentive to spend again, as this would incite confidence back into the market.”
