30 January 2011
I blogged last year about the Government’s overspending. It was described to me in plain and simple English: “For every £3 the government earns, they are spending £4.” So, to break even they’d have to reduce spending by 28%.
Watching the BBC’s political programmes this morning, it shows just how oblivious today’s politicians are with basic accounting principals. To compound the huge problem of overspending, there are politicians drumming up unrest against necessary cuts in expenditure.
Furthermore, it is clear that councillors from certain regions seem hell-bent on deliberately cutting frontline services in the knowledge that it puts significantly more pressure on communities, in the hope that it reflects badly on the current government.
In business, if you overspend, you end up in trouble.
With all the technology at our fingertips in today’s society, how can we not balance the books? Where else in the world can you get away from this sort of lack of control, where you can spend more than you make and get away with it? Oh yes, I forgot, the banks!
Between the government and the banking community, we really have been led up the garden path. Yet in spite of all the warning signs, the government continue to spend like it’s going out of fashion; and sadly our once great nation is doing just that.
As entrepreneurs, we – as a group of people – do not have it as easy. We do not have a cushion to fall back on and the state that we eagerly feed crushes anyone who fails to comply or who falls behind. Unlike when banks mess up, small businesses are literally wound up. And for those of us who make it, we are “wound up” by government officials chasing our tax in a most brutal manner. There is not a business in the world that would survive if they possessed the customer service skills of a typical tax collector. We are not valued, nor thanked, nor supported.
Ironically, “we are the hand that feeds” yet they devour our earnings in the guise of taxation and waste money because they do not understand just how hard it is to earn. We should take every politician and make them work a proper working week without expenses, on the minimum wage. That’s how the rest of us started off. How long would it take before they started to see just how tough it is and learn the value of our currency? But would they spend our taxes any the wiser? I doubt it.
Why do people who don’t understand how to generate money run our country and run our banks? This is a fundamentally flawed system. I don’t care what political or economic degrees today’s politicians have; the majority are unemployable in industry, and although there are signs that the latest regime are consulting business folk, it’s so late in the day.
When I grew up there were many people that we looked up to. Politicians were icons, Rock stars were Demi-Gods, business people were giants, the Monarchy were massive, Britain was the envy of the Western World.
So, what’s changed?
When you get good at something, it’s easy to take your eye off the ball. Being a tiny island is one of the reasons I believe Britons have driven so hard throughout the ages. We have often been the underdog but the bigger the challenge, the bigger the Britain. And we love a challenge.
But somewhere down the line, someone suggested that children shouldn’t try and win at sports day, black boards become chalkboards, politicians became wannabe pop stars and dancers, and the country took its eye off the ball. And around the rest of the world, hunger was awakening a new driven generation, a generation who heard about Great Britain, the promised land. The kids from these deprived countries grew up trying harder with nothing to lose and everything to gain.
Back in the UK, our politicians argued amongst themselves, fighting for power and not for us.
What would William Pitt or William Wilberforce make of today’s modern day politicians? What do the outside world make of the public spectacle that is televised Parliament? It’s a sobering thought but these are our leaders bickering like Alan Partridge characters, whilst TV amplifies every flaw.
Meanwhile, the rest of the world stepped up a gear, improving roads, schools, hospitals. And to the emerging world we exported Eastenders and Coronation Street and our serious BBC political show on a Sunday morning discusses the sexual preferences of the Ribble Valley Tory MP, Nigel Evans. Too much information over breakfast, in my opinion. Have they forgotten we are British?
The result of all this? One day we stopped being Great and just like Mohammed Ali said: “I am the greatest long before I ever was.” The reverse happened. We became the UK. United maybe, just no longer Great Britain.
Then with the advent of the internet, all boundaries dropped and we were considerably weakened. Other countries with more competitive and cheaper workforces, and better tax structures ensure that, very quickly, the balance of power is shifting.
And now, where do the great British public look for help?
Politicians have proven that we cannot trust in their system that they took advantage of. Stealing money through falsifying expense claims. Nick Clegg publicly “declared war” on media mogul Rupert Murdoch, a man who has singlehandedly paid hundreds of million pounds of tax, creating thousands of jobs in countries all over the world. Yet, he remains in power? It appears that murdering our great nation is now legal!
There is no voice or vehicle for change. We live in a semi-dictatorship dressed as a democracy.
If our country doesn’t balance its books, if we continue to wage war on countries who need help, and if our schools, hospitals and once great institutions don’t join hands and work together with pride, the steady decline we are currently experiencing will simply gather momentum.
And as a businessman it saddens me because I have always worked hard to help improve people’s lives and I am proud of the amount I am able to contribute through my taxes. Yet, I heard a story yesterday of a business that supplied the public sector flourishing massively after the announcements of government cuts. The departments they sell to couldn’t spend the money fast enough for fear of having the money taken away from them, whilst the commercial sector of the same business struggled, because quite sensibly, businesses tightened their purses.
The answer, in my opinion, is that it’s time to pull together. Labour and Conservative. Whatever your calling, there is a much bigger worry on the horizon. You don’t argue with the waiter about your steak as the Titanic sinks. You pull together, knowing that there will be casualties and acknowledging the difficult position these cuts will leave thousands, if not millions, of people in. However, making the UK more competitive will eventually kick start the economy and, in time, jobs will be created. But ultimately, if you suffocate the entrepreneurs with high taxes and zero support, the bigger businesses will disappear to sunnier, more tax-efficient destinations, leaving less revenue.
There needs to be an attitude shift towards the spending of the money, with a focus of on “efficiency.” We cannot continue spending money that we don’t have, both as a country and personally. So, we have to be sensible with what is left. It’s a healthy discipline that everyone should employ. I recently went through our expenditure and managed to remove £1m of costs with some simple restructuring.
The result: we are more profitable, stronger for the journey ahead, and the extra money bolsters exciting plans for the future. Cutting costs is not the end of the world, it’s the beginning. However, it needs to be done carefully and intelligently, ensuring minimum disruption.