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Tony Byrne: Govt stealth tactics are killing business

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Over the last 20 years I have noticed an ever-increasing shift of responsibilities from the Government to businesses. Let me list some of the burdens introduced:

  1. Unpaid tax collectors.
  2. Policemen: Financial services firms must have robust systems to detect money laundering. The penalties for getting this wrong are harsh, ranging from fines to even imprisonment for the money laundering officer.
  3. Welfare benefit providers: Firms have had to pay statutory sick pay, as well as maternity and paternity pay, for many years. Over the next few years, the minimum wage is set to increase from £6.60 to £9 per hour (an increase of 36 per cent) at the same time as benefits are cut further. This clearly signals a switch of welfare benefits provision from the state to businesses.
  4. State pension providers: What is auto-enrolment other than compulsion for firms to provide pensions for staff while the Government increasingly reneges on its promises? The postponement of the state pension age, for example, is bound to get worse. Forcing employers to retain older staff and, as such, denying young people the chance to work, is simply age discrimination.
  5. Greater bureaucracy: The FCA has created a massive increase in regulatory costs to businesses, for example.
  6. Stealth taxes: There are far too many to mention. The FCA fees and Financial Services Compensation Scheme levies are just disguised business taxes.
  7. Tax on jobs: Employer’s National Insurance contributions (a significant 13.8 per cent on top of salaries) provide no benefits whatsoever apart from boosting the Government’s tax coffers.
  8. HR legislation and regulation: The fear of being taken to the cleaners by a disgruntled ex-employee means many firms are afraid to dismiss staff no matter how bad they are.
  9. Health and safety overregulation: The stories of ludicrous rules typically invented in Brussels beggar belief. The ultimate penalty for the employer is corporate manslaughter, including fines and a possible prison sentence.

The consequences of these crazy policies are clear: less employment and lower overall pay and benefits for those in work, as well as a deterrent to entrepreneurism, risk taking and hard work by would-be business owners.

And the solutions for business owners? Increased automation, such as utilising robotics and taking on the likes of virtual assistants from low cost countries, thus exporting jobs.

When you think about the current onslaught on businesses you start to wonder why anyone would even bother setting one up in the first place. Certainly, if I were to start a business today I would avoid financial services like the plague or at least be wholly web-based, not employing anyone. No wonder the rise of robo-advice is so inevitable.

I consider many of these measures to be more akin to those of a communist dictatorship than of a free enterprise Western democracy. They are the silent killers of entrepreneurism and the free market economy. They are truly shameful. If the Monster Raving Loony Party had dreamt up these polices 20 years ago we would have laughed at them. It is not so funny now…

Tony Byrne is financial planning director at Wealth and Tax Management and author of Wealth Magic

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. “Forcing employers to retain older staff and, as such, denying young people the chance to work”

    I stopped bothering here. There is not a fixed number of jobs in the economy. An older person who continues working past 65 no more denies a job to a younger person than a migrant does to a native.

    An old person who works continues to create things of value, from which he receives an income, which he uses to buy stuff, which creates more jobs, and so on and on.

  2. At last! Someone who is on the same page and is able to express his dissatisfaction most ably.

    However (and doesn’t there always have to be an however!) I do agree – yet again – with Sascha. In my experience younger workers just don’t have the work ethic and indeed a recent report bore this out as youngsters seem to want to focus on ‘a better work/life balance” which to me is just another way of saying you are workshy. Older workers have experience, a solid work ethic and if they are over SRA will save you NI into the bargain. And how I do agree with you with regard to that woebegone AE!

    As far as NI is concerned – you are again quite right, but the calumny is that most people actually believe it goes to pay their pension and healthcare.

    As far as the minimum wage is concerned I think that if firms want to pay less than £9/hr they should be ashamed of themselves. If you want such worthless employees you are better off automating or paying your existing workers more to take up the slack.

    With all this Governmental veniality over the years are you surprised that a plonker like Corbyn actually has a groundswell of support.

  3. Christopher Petrie 27th August 2015 at 8:46 am

    When you are as right wing as Mr Bryne, the whole world must appear to be “communist” to you. The comment about “age discrimination” is laughable.

    Not sure that this article really has a place in MM. Perhaps it would fit better in the letters page of the Daily Mail/Telegraph, from Mr Angry of Tunbridge Wells?

  4. I do not agree with a fair few of the examples used to illustrate his overarching point, but Tony’s central point about bureaucracy killing business is spot on. Being a financial adviser firm or sole trader is a tough role these days.

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