Industrial strategy

July 18, 2016

The new mission statement for the Department of Business, Energy and Industrial Strategy is interesting (read it here).  I’m particularly thinking about the first article:

developing and delivering a comprehensive industrial strategy and leading the government’s relationship with business

which is really two different things but they’re closely related enough that I can see why they put them together.

The new Minister, Greg Clark, has a statement on the website which basically could be translated as “squee!” which is all you would expect in your first day on the job.  However there are a couple of ways that a newly-energised BIS (oh all right, BEIS) could usefully interact with the tax and benefit system.

“Leading the government’s relationship with business”?  Maybe some bilateral talks with HMRC about their relationship with businesses, perhaps aiming to rebalance the energy which goes into large and small businesses.  What do I mean?  Large businesses get a customer relationship manager, they get to have “non-statutory business clearance” discussions (but never “sweetheart deals“): small businesses get self-service on a website.  What could they do in practice?  Are there any “quick wins”?

Well, maybe it’s time for an external look at the Administrative Burdens Advisory Board which is supposed to give HMRC an objective stakeholder view of the burdens they place on small business.  While they did sterling work back in the days of the Labour government, when HMRC had a series of “new relationship” papers at successive Budgets, setting out the work they were doing to cut the measurable admin burden by 10%… now?  Maybe the membership needs a refresh, the remit needs a wash and brush up… The telling thing for me was that ABAB – the small business champions – and the EU VAT Action Group – the quintessential small and micro business group – had never heard of each other when I posted the ABAB survey on the EU group Facebook page.

Secondly, as you will know if you have been a regular reader of this blog, my major bugbear with the HMRC relationship with taxpayers is the “stakeholder” model, which seems to me to resemble the pre-revolutionary France “estates” model.  It’s possible to make your voice heard in HMRC and the Treasury, but your voice will be listened to a lot harder if you’re a member of a big city legal firm, a major accountancy firm or body, or a trade association.  It doesn’t have to be that way: it would be perfectly possible for HMRC to get views and opinions from small businesses, but it takes time and money and effort: it takes going outside of London and outside of business hours and outside of the civil service comfort zone.  It takes explaining the issues in plain English to people who aren’t going to fall over themselves with delight at the thought of talking about tax but who are going to be interested when you let them know how it connects with them and their lives – and who are going to be bloody furious if they only get to read half-informed journalism instead.

So those are my suggestions for the new Department’s “we lead on relationships with businesses” chat with HMRC: have a look at the allocation of resource between small and large business, and at the “stakeholder” concept.  But by the rule of three, this sort of article ought to h ave three ideas, right?  Well here’s a Modest Proposal for the “industrial strategy” part of the remit.

Why don’t unemployed British people take jobs fruit picking?  Why do farmers complain that they only take on foreign fruit pickers because British people won’t take the work?

This is a question only asked by people who have never been unemployed (or at least not in the modern “austerity” age of unemployment).  If you are on JSA  or Universal Credit you’re in a binary system: either you have a job or you don’t.  Who would take the risk of taking on two weeks’ work picking fruit at minimum wage if they are then going to have to re-start their application for benefits from scratch, including waiting six weeks to get anything at all…

If you had a basic income (give everyone ten grand a year instead of a tax allowance or benefits, and tax them at a moderate rate on anything over that) then your fruit picker would be two weeks better off from their two weeks work.  And you could go back to having useful offices called Labour Exchanges, whose job was actually to find you a job…

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