The research, which involved interviews with 1,204 eight to 15-year-olds across Britain, found that the average estimate for a pint of milk was £1.12, making the actual cost of around 45p seem like a real bargain.
When it came to stamps, the average cost suggested was £1.16 – rising to a hefty £1.92 in Wales – compared with an actual cost of 41p. Youngsters were also out of touch when it came to the TV licence, with an average estimate of the fee of just £10.48 rather than the actual figure of £145.50.
While this all might seem like a fun way for Halifax to gain some useful media coverage, the results of the survey raise some serious issues.
Without sounding like “It wasn’t like this in my day” grumpy old man, understanding the value of money at an early age will help to teach youngsters the budgeting skills that will keep their finances in good shape later in life.
If kids don’t understand at an early age how much things cost – nor that there’s work involved in earning the money to pay for them – their future financial road could turn out to be more than a little rocky.
The “buy now, pay later” easy credit culture has its fingers firmly in the pie of the global economic crisis and if that doesn’t galvanise today’s parents into teaching youngsters the importance of living within their means, then the financial pain so many are suffering now could all too easily be repeated further down the line.
There’s one piece of good news from the Halifax survey though. It found that 77 per cent of children wanted to learn more about saving. And that, as they say, is priceless.
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Conservative veteran Lord Young – the former trade and industry secretary and president of the Board of Trade – has been appointed by David Cameron as his enterprise adviser, with the remit of slashing red tape for small firms and pinpointing what needs to be done to help them grow.
His first assignment from Mr Cameron? To write a “brutally honest” report examining how government departments interact with and affect small businesses, something that is likely to have entrepreneurs up and down the UK cheering on Lord Young from day one in his new role.
Mr Cameron says: “There is so much more that we need to do to back up our commitment to make this country one of the best in the world to start, run and grow a small business. I am seeking nothing less than a wholesale change in attitude from my Government and I need help to get there.”
It’s a tough task but Lord Young packs a considerable punch. He knows what it is to build and run a business, having a couple of decades of hands-on experience of doing just that, and, wearing his other hat, as the Prime Minister’s adviser on health and safety law and practice, he last month published his Common Sense, Common Safety report, which clearly shows he’s all in favour of reducing burdens on small businesses and “shredding red tape”, as he puts it.
A good way to start the week then: let’s hope that small businesses don’t have to wait too long before Lord Young starts up his shredder.
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However, 38 other bids for LEP status were rejected and the opposition, not mincing its words, denounced the plans as a ‘pathetic fig leaf’. Furthermore, they come just months after the government announced the abolition of Regional Development Agencies, which played a similar role. So what can we expect from the LEPs?
A £1.4billion ‘growth fund’ has been made available by the government, which LEPs have until January 21 to bid for a share of. LEPs will be able to initiate programmes to support high-growth businesses, as well as making representations to government on issues such as planning and infrastructure projects or training issues.
The total amount of funding, however, is far less than what the previous government spent on RDAs – which the present government claims is because the new bodies will be less ‘top down’ and more efficient, but opponents argue will reduce their effectiveness.
What funding is available will not only be available to RDAs, with private groups and public-private partnerships also able to make bids. How much funding RDAs eventually get from central government may well determine their effectiveness, since it is unlikely that councils – facing their own funding squeeze – will be able to contribute significantly to their costs.
The government is also considering proposals for local authorities to keep the business rates they collect locally, rather than the rates being passed to central Government, as happens at present. This may make more money available for business development in some areas, but others could be left worse off.
How effective these new bodies will be remains to be seen but, with sources of new funding few and far between, businesses and their advisers would do well to keep them in mind and investigate what opportunities may exist in the future.
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The results of a new Boston Consulting Group (BCG) report commissioned by Google report make fascinating reading. It found that the internet is worth £100 billion a year to the UK economy, accounting for 7.2 per cent of our gross domestic product in 2009, a figure that BCG expects to grow to ten per cent by 2015.
What’s more, the report says that the UK is the world’s leading nation for e-commerce. For every £1 spent online to import goods, £2.80 is exported – reversing the trend in the offline economy, which the report says exports 90p for every £1 imported.
Internet companies now employ 250,000 people, according to BCG, with many of them working in small and medium-sized businesses.
Yet according to figures released in February as part of the launch of the Getting British Business Online campaign, 1.5 million small businesses have no web presence at all.
That campaign, which includes a tool to help businesses get online quickly, easily and for free, aims to get 100,000 British small businesses on the internet by the end of 2010, with the results due to be announced in December.
The message that’s coming across loud and clear is that the web can work wonders for British businesses. And that’s got to be more than just virtual food for thought for any firm that’s not yet online.
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Hot on the heels of yesterday’s announcement that GDP was up by 0.8 per cent in Q3 – better than expected and the fourth quarter in a row that the figure rose – the Daily Telegraph tells us that now interest rates could rise faster than previously thought from the 0.5 per cent at which they’ve been held by the Bank of England since March 2009.
It says little change had been expected before the end of 2011 but that following the strong showing from GDP, some traders are predicting two rate rises over the coming months, with a base rate of at least one per cent by the end of the year.
And it quotes Andrew Sentance, a member of the Bank of England's monetary policy committee (MPC), as saying: "I am in favour of gradually moving interest rates up from their very low level, which I think can be done without disrupting business or consumer confidence.”
Nobody doubts that getting the balance right between interest rates and inflation is a tough call.
But at the risk of repetition, the focus will be very much on the private sector over the coming months and years to drive the recovery and create jobs.
And the Federation of Small Businesses (FSB) says that those firms that use the banks as their main source of finance are being penalised by high interest rates, despite the base rate sitting at an all time low.
So they are hardly likely to welcome even a 0.5 per cent rise over the next 12 months, at a time when the FSB’s latest quarterly survey, published earlier this month, found that 10.4 per cent of firms expect to decrease employment over the next three months as business confidence in future prospects and revenue growth weakened during the third quarter.
The MPC’s nine members have a huge responsibility on their hands in nursing the economy back to full health. We can only hope that the decisions they make over the coming months will be the right ones.
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