Enterprise at heart of Brown’s pre-Budget speech

2004

Britain is set to become a world leader in high-tech jobs and enterprise, fuelled by a highly skilled, highly flexible workforce – at least if you believe Chancellor Gordon Brown.

In his pre-Budget statement, the Chancellor, long a fan of the US, painted a picture wherein the UK would begin to match the US for rates of small business creation and entrepreneurship, with enterprise even being taught in schools.

In a wide-ranging speech, Brown said economic growth this year will be 3.25 per cent, 3 to 3.5 per cent next year and 2.5 to 3 per cent in 2006.

Inflation, he predicted, will be 1.25 per cent this year, 1.75 per cent next year and 2 per cent in years to follow.

At the same time, business investment will rise by 5.75 per cent this year and by between 4 to 4.5 per cent next year, with exports set to rise by more than 6 per cent this year, he argued.

To promote his enterprise drive, a small business unit is set to be created at the newly merged Inland Revenue and Customs & Excise, he said.

The Government is also going to look at feasibility of creating a single tax return for small businesses, who have long complained about the complexity of the Chancellor’s taxation regime.

Other key announcements included the extension nationally of a pilot to encourage employers to let workers with low or no skills obtain qualifications.

Brown described low skills as Britain’s economic “Achilles heels”, which had dogged productivity levels for decades.

Under the scheme, called the Employer Training Programme, employees without GCSE level or equivalent skills will have the opportunity to take up the extra training, with the Government helping to pay for the time off.

On flexible working, Brown set out an ambitious ten-year childcare strategy, including the extension of paternity and maternity leave, with mothers becoming entitled to nine weeks’ of paid maternity leave from April 2007.

But although parental leave will be transferable between mothers and fathers, Brown failed to make a widely-expected pledge to extend maternity leave further to a year, an idea widely floated by some of his cabinet colleagues.

Parents with children of three or four years old will be able to access 15 hours of childcare a week as many as 250,000 single parents will get £40 a week bonus - or £2,000 a year – if they return to work.

Brown also said he wanted to look at ways to increase employment rates among ethnic minorities.

He announced more research and development tax breaks for medium sized science-based firms and help for university spin-offs, including a £2.5bn investment in science, creating what he called "science cities of the north" in Manchester, Newcastle and York.

An industry-led science forum would also be set up, he said.

But for public sector workers it was a less pleasant speech. Brown reiterated plans to make £21b of savings through civil service job cuts and relocation. By 2010, 20,000 jobs will have been relocated to regions, he said.