Even though the financial crisis seems to be coming to an end, the road to a healthy economy for the United Kingdom is still a long and winding one. According to Michael Oliver, however, this state will be achieved faster if the government would lend a helping hand to increase export by small and medium enterprises.
In an article on the website of the Financial Times, Rachel Bridge informs us about Michael Oliver’s views on measurements that need to be taken in order to give export sales a big boost.
Oliver is the founder of Oliver Valve, a company that produces valves for the international oil and gas market. And he is no layman when it comes to expansion; when he founded Oliver Valves in 1980, he wasted no time and got right into the exporting business. Currently, export makes up 80 per cent of Oliver Valves’ 100 million pound turnover.
According to Oliver, more export means less unemployment in the UK itself. Moreover, he thinks it will also trim down the nation’s national debt, which is still growing and annually adds up to 46.5 billion pounds of interest payments.
Bridge states that Oliver believes British businesses must be encouraged to shift their focus to export markets. She says Oliver has come up with the following plan to achieve this:
:: the government should give all exporting companies that are in British hands a tax credit.
This credit should make up ten per cent of every pound of sales made overseas, which businesses can then use to diminish their corporation tax bill.
Here, Bridge gives a simple example: if a company made a 50 million turnover of which 40 million was made overseas and their pre-tax profit equalled 8 million, they would only have to pay tax on half of this profit if this measurement would be implemented.
According to Oliver, companies measurement should also require companies to use the money they would save to expand their export. Thus, he believes supervision is in order. According to Bridge, Oliver said these export credits would be a great motivation for companies to put more effort in their expansion activities.
Critics might object to the measurement by saying it would only cost the government money, Bridge says. However, Oliver disagrees; in fact, the benefits for the government – an increase in jobs and a lowering of the national debt – would be far greater that the initial money it would attribute to the companies involved.
Oliver believes the returns for the government would not only be tremendous, but that the measurement would pay itself back in no time as well. Oliver believes it is up to the current Parliament to take action; if they don’t, he predicts that in five years, the country will be in an even greater mess than it is currently in.
Let’s see what Osborne does!