David Seall Blog

The economy and where is it going?

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This week apart from the obvious noise about local elections and AV has still been about the economy to me.
On the back of the disappointing growth figures from last week we had the great news form the Bank of England MPC that interest rates would continue to be on hold at their lowest rate in living memory.
As a simple businessman it beggars belief to me that anyone would consider putting up rates when there is such fragile consumer confidence and that most of the inflationary pressures come from increased fuel prices and the January hike in VAT. These will drop out in January and we will hopefully see a fall.
At a dinner with senior Surrey business leaders we hosted earlier in the week our guests IoD DG Miles Templeman and Director of Policy and Chief Economist Graeme Leach were firmley of this view. In fact Graeme will be joined by LloydsTSB Chief Economist Trevor Williams to debate the point further at an IoD special event on 17th May at Canon HQ in Reigate http://bit.ly/f0HHwk.
I have also been busy with a final article on the budget (attached)
I hope some of you are able to come along for what promises to be a great evening on the 17th!

In the press- Budget response- new article in the Herald newspaper

Herald article 2

Views on the budget from Surrey Business

Views on the budget from Surrey Business

What does Surrey need in the budget?

As regionalism declines and localism grows we find ourselves in an interesting situation in Surrey. We have two new Local Enterprise Partnerships (LEPs), one in the east and one in the west. Additionally we have the possibility of one for the whole County. They all have a tough task to fill the shoes of the activities SEEDA did to promote business growth. Whatever pans out its certain that the days of government funded economic development in the South East are virtually over so we will have to be innovative in what we do and how we work together.
The North has struggled to replace heavy manufacturing industries like steel and coal and the move to public sector employment was unsustainable. Therefore it’s clear that Regional Growth Fund (RGF) monies will inevitably go to the areas that traditionally struggle when times are hard.
However, we have to ask ourselves should investment in economic development be at the expense of areas that not only have the potential to deliver more but have a track record of actually achieving this? The South East, particularly Surrey, is the engine room of the national economy generating tax revenues for HM Treasury. Perhaps monies invested in key infrastructure such as the A3 around Guildford could not only pay for itself in increased productivity but also raise more tax revenues to help the North? Additionally world class broadband would make such a difference. It’s a shame but I can’t see it happening.
We have to focus on key areas to make growth happen. These are not only the obvious ones such as Innovation in all its forms and skills development, but also dealing with the issues that will drag us back such as youth unemployment, affordable housing and finding gainful employment for displaced public sector employees; particularly those in management positions whose purchasing power not so long ago was keeping the economy going.
We also need signs from the Treasury that those that do make the effort to innovate and grow businesses have the personal incentives to do so and have a tax regime that supports them for taking risks and investing. What we don’t need are discriminatory taxes that hold back the recovery in the South East in an effort to create an even playing field of mediocrity.