In the run-up to the event, much of the spirit of co-operation that characterised the immediate aftermath of the ‘credit crunch’ two years ago appeared to have evaporated. While the USA was under pressure for running a massive trade deficit and devaluing its currency through quantitative easing, China was being similarly pressured for holding its currency at an artificially-low level.
Following talks at the summit in Seoul, South Korea, the leaders agreed to avoid ‘competitive devaluation’ and also pledged to come up with ‘indicative guidelines’ on how to correct distortions in currency and trade.
While it is to be welcomed that the heads of state at least agree on the problem, reaching a solution will not be easy. One of the biggest issues in the weakness of China’s currency, the yuan, which critics say gives the country’s exporters an unfair advantage as well as allowing the country to amass huge foreign reserves.
China has responded that it will allow the yuan to gradually appreciate, but only when global economic conditions are right. Proposals for a four per cent limit on deficits or surpluses were blocked by China and Germany – the two biggest exporters in the G20.
While other countries’ concern at the Chinese position is understandable, it is difficult to criticise them for holding their currency down when other countries, such as the USA and UK, have effectively done the same through interest rate cuts and quantitative easing.
While the immediate threat of a currency war may have receded, this issue may crop up again in future as countries’ put their own interests ahead of those of the global economy. However, the fact that governments at least recognise such an outcome would not be desirable is positive news.
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( 3 / 269 )Now here’s an offer you can’t refuse. Writing in the Daily Telegraph today, Lord Young, David Cameron’s enterprise adviser, says he would like to hear - first-hand - from as many people as possible who are working in small firms.
He says: “To that end, I will be touring the country, and am working on ways to help anyone reach me with their ideas.” Let’s hope he isn’t trampled in the rush of entrepreneurs wanting to tell it like it is.
Lord Young certainly seems to be singing from the same hymn sheet as small and medium-sized enterprises up and down the country who are the lifeblood pulsing through the British economy and helped to deliver national prosperity.
The new enterprise “tsar” comes from a background in small business and he understands the issues these enterprises face.
He also understands that over recent years, they have faced obstacle after obstacle. Now his goal is to make government more small-business friendly and encourage the birth and growth of new firms.
Three cheers for that, we say. Lord Young starts his article with a frank admission that he has no power in his “tsar” role. What he does have is the ear of the Prime Minister and the sooner he starts talking, the better.
For more information, visit www.harris-lipman.co.uk
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( 3 / 269 )Amid all the hoopla and headlines surrounding David Cameron and his team’s high profile trade and relationship building visit to China this week, an interesting little nugget of news may have slipped under the radar.
The Forum of Private Businesses, an organisation supporting and advising small and medium-sized enterprises (SMEs) across the UK, has released the results of a survey that found only 28 per cent of SMEs believe the coalition government will make a noticeable difference to the rules and regulations they face.
Many members of the forum’s Red Tape panel who took part in the survey said they based their view on the failure of similar past initiatives while an overwhelming 89 per cent of those surveyed felt that legislators did not understand how regulations affect small employers.
Forum research manager Thomas Parry said: "It would appear that many small firms feel as though we are now past the point of no return with legislation – there's a sense that because there's so much of it and it's so deeply embedded in our legal framework, any attempts to tackle it are doomed to failure.”
The forum’s findings certainly chime with those of last week’s Better Regulation Executive’s Lightening the Load report is based on the results of interviews with 500 businesses employing fewer than ten people. It found that businesses were struggling to cope with existing regulations and that new regulation or change simply added to their problems.
With the evidence mounting that it’s not just the recession that makes life so tough for the UK’s small businesses, some might be forgiven for thinking that while top level trade delegations will no doubt bring their fair share of benefits to the UK in the future, making it easier for our millions of SMEs to do business on their home turf makes just as much sense.
For more information, please visit www.harris-lipman.co.uk
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( 2.9 / 259 )There’s only 45 shopping days to go until Christmas but if the goose is busily getting fat ready for festive feasting, the prospects for whether retailers’ tills will do the same are not looking too rosy.
The British Retail Consortium (BRC) today released figures for October that showed a distinctly downbeat 0.8 per cent rise in retail sales on a like-for-like basis from October 2009, when sales were up a rather more perky 3.8 per cent.
BRC director general Stephen Robertson says that outside the food sector, where sales growth is in any case partly due to food inflation: “It’s a struggle to convince wary consumers to part with their money”.
He adds: “84 per cent of consumers think the economy is still in recession, while 26 per cent say they have no spare cash. Retailers will be hoping those concerns are at least put on hold for Christmas.”
If Christmas 2010 is not going to set sales records, the looming VAT rise in January at least makes it a good time to push the gravy boat out just a bit more than we might currently be planning as 25 December comes a little closer and the Christmas spirit takes hold.
With 2011 ushering the full impact of the government’s Spending Review cutbacks in earnest, eating, drinking and making merry in the traditional way – even if it is on a budget – might not seem such a bad idea before the next round of belt tightening begins.
For more information, please visit www.harris-lipman.co.uk
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( 2.9 / 246 )A week or so ago, a new report highlighted the internet’s £100 billion a year-and-growing value to the UK economy.
Now we have another growth area. UK space companies have defied the recession, according to a report by the Oxford Economics consultancy, growing by an average of ten per cent a year from 2007. The report predicts that 2010 will also see continued growth.
Based on a survey of the activities of 260 leading companies, the report, commissioned by the UK Space Agency, says that the space business now has a turnover worth some £7.5 billion, with employment rising by about 15 per cent a year.
The sector recently set out a 20-year vision for itself called the Space Innovation and Growth Strategy, or S-IGS, which called on the industry to step up research and development spending but also for the government to increase investment, as well as making long-term commitments to buy its products.
If that happened, it said, the UK space sector could create up to 100,000 new UK jobs in space-related activity and grow revenues to £40 billion a year.
The space industry may still be something of closed book to most of us but its success is clear proof that the UK still has, in spades, the vision, expertise and skills that have stood us in such good stead on the business front over the centuries.
So if there’s a chance for the sector to boldly go where no man has ever gone before – with a helping hand from the British government, perhaps – that final frontier might just prove not to be so final after all.
For more information, please visit us at www.harris-lipman.co.uk
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