Bill Sedat Frater is an entrepreneur with several London-based businesses.
The Government continues to assert that the country’s economic resuscitation will require “difficult decisions”. This time, the Chancellor has used her maiden Autumn Budget to raise employer national insurance contributions to 15 per cent.
Such a move would be disastrous, particularly for those who own and work in labour-intensive industries such as hospitality and entertainment. These sectors are likely to be significantly impacted by an increased tax burden, which will inevitably affect profitability, staff wages, and potentially lead to higher costs for customers.
While the UK continues to plunge into an anti-entrepreneurial climate, it is no secret entrepreneurs and business-minded individuals are increasingly participating in an exodus to more business-friendly markets like the Gulf region. I suspect this trend will only accelerate with this move from Labour.
To reverse this, the Government must not only avoid raising taxes but also should have outlined in its Budget a clear pathway to substantial and sustainable reductions in tax in the medium-term to support entrepreneurship.
We need a tax system that will cultivate the next generation of entrepreneurs; one can only look to the UAE to see the benefits of such an approach…
The country has signed rapid trade deals and created an environment conducive to a prominent expat community, which constitutes nearly 90 per cent of its population. This ecosystem attracts businesses, stimulates innovation, and offers essential support for growth. As such, the Emirates position themselves as a hub of stability and finance in the Arab world amidst regional uncertainties.
As the UAE refines its relatively new economic policies compared to those of the UK, it is clear that the country is prioritising entrepreneurship – a rarity in today’s over-regulated bureaucratic landscape.
October 30 marked a crucial moment for everyone in Britain. Our leaders have pledged to grow and protect an economy that has repeatedly failed to support the very people who put it on the world stage: entrepreneurs.
In contrast, leaders in the UAE have created visas and business funds to support individuals at various stages of their careers, while also rewarding them with no capital gains tax on investments – something this Government has increased by 10 per cent for those in the lower band, and 6 per cent of those in the upper band.
Since Labour had Downing Street in its grasp, it has persistently criticised the previous government for mishandling the economy and has intensified its own call for growth. Despite this, they have yet to acknowledge the UK is at major risk of backsliding on its once proud culture of attracting individuals who drive economic transformation.
The Government has been eager to tout private investment in the UK, especially during its recent investment summit. However, there appears to be a noteworthy conflict between its words and actions. Arguably, it has not done much to encourage investment other than be a new Government perceived as more stable than the last
Considering they have now surpassed 100 days in office, private sector patience is likely to wear thin if they continue to rely on rhetoric simply to boost their PR, without implementing the necessary incentives and removing barriers. Undoubtedly, they will run the risk of failing to attract and support entrepreneurship effectively.
So why is the Government deciding to raise national insurance, when global examples of opposing economic policies have nurtured a culture of entrepreneurship that promotes exponential economic and commercial growth?
What this Government must also recognise is that the UAE’s commitment to economic diversification, coupled with the establishment of over 40 free zones that exempt companies from import and export taxes, among other benefits, has created a favourable environment for business. Additionally, and predictable regulations have provided entrepreneurs with the security and confidence they need.
To be frank, no matter how much Labour promises to deliver economic growth, actions speak louder than words, and a burdensome tax policy sends a clear message to business owners and entrepreneurs alike.
Many may be reluctant to acknowledge this stark reality, but the former British protectorate has now become a model for what the UK should aspire to achieve economically. It’s about time we follow in suit.
