Nothing to lose but our chains
BUSINESS VIEWPOINT
JACK FRYE
The young ladies of Surbiton who started their 'We Back Britain' campaign with the idea of a free half-hour's work a day for Britain have caught the imagination of the nation. Although their idea is only of limited application, the spirit behind it, if it could be adopted nation- ally, could have immense effect for the nation.
In all the chorus of congratulation which followed their lead, one voice has been notice- ably absent, that of the Government. One would have expected that it would have seized on the idea and used it as the basis of a nation- wide campaign in a much wider sphere, instead of merely sending a telegram of congratulation. This is an unrivalled opportunity for the Gov- ernment to bring home to all of us that only by harder work and higher productivity in all spheres of life can we not only overcome the present crisis but also obtain the increase in our standard of living which we would all like, but which will be denied us until we as a nation can once again pay our way. The Government will not be listened to until it has itself shown the way by taking more posi- tive action to remove the shackles which inhibit the incentive to produce more both for indi- viduals and for industry.
Initiative in Britain is being shackled by the lack of incentive in every part of life. In childhood, one is constantly spurred by incen- tives—ranging from the sweets and presents in early life to school prizes and university places which are the rewards of initiative and application at school. When one leaves school to start a career, therefore, it is in the antici- pation that application and hard work will bring fair rewards..
It is at this point that the system falls down —for now the tax bogyman enters the picture, greedily devouring hard-earned rewards. The more one earns, the more he takes, so that initiative and the will to work are crippled and life is reduced to a one-way bet—if you lose, you are lost anyway; and if you win, he takes all.
The effect of his operation is to kill all in- centive, crippling our economy at its heart, and leaving a nation of listless individuals shorn of all initiative, or cheats trying to get round the system, forcing the best of our younger people to emigrate and encouraging the brain drain. Under our present system, who can blame them?
If the Government is really anxious to bring back the spirit of the Elizabethan era; to make the British people go 'all-out' to beat the present crisis—it must take active steps to bring practical as well as moral incentives to the PeOPle—inCefltives which can operate from the cradle to the coffin. Let it first reduce income tax by a massive amount-25 per cent at least —and amend the PAYE system so that overtime or other additional earnings are taxed on a more reasonable basis. This would give the wage-earner—and we are all wage-earners— the opportunity of being properly rewarded for working longer or harder, and put back the incentive to go 'all out.
Where is the money to come from? This could be obtained quite simply by bringing in, as many countries have done, a sales tax, which could easily compensate for the loss of revenue without having a serious effect on prices. Then the individual, having to pay more for his purchases but having more money to play with, could decide for himself, by buying or not buying, how he pays his tax, instead of having it decided for him. We shall have to bring in a sales tax of some description when we join the Common Market, so why not do it now?
Obviously, steps would have to be taken to protect old-age pensioners and other classes of the community who are on low or fixed incomes, but in the long run I am sure that these suggestions would beat the tax bogyman and give us the incentive to work, the incentive to play, and the incentive to live, which we must have if we are to survive as a nation.
A further vital field in which government policy is strangling initiative is in the export field. We are continually being told to 'export or die,' but the Government's consistently un- realistic and unbusinesslike measures have the effect of actively discouraging companies from expanding in the expensive and difficult export field.
One of the few positive measures which did encourage exports—the export rebate—has now been withdrawn, in spite of the fact that most of our continental competitors give a benefit to exporters by the remission of the 'added value' tax, and even America is now considering some lack Frye is chairman of the B. Elliott group of machine tool companies, and also of the Iron and:Steel Consumers Council. form of tax rebate to exporters. Anothzr damaging restriction is the political interference which stops us exporting Certain goods to South Africa, cuts off all trade with Rhodesia. refuses to recognise the East German govern- ment, and even inhibits our trade to countries such as Cuba or China because the Govern- ment is not prepared to stand up to outside influences.
Let the Government take off political re- strictions, allow the country to sell all the goods it can wherever it can, and restore a definite material incentive to exporters by a 5 per cent tax-free allowance on exports on condition that this amount is reinvested as capital back in the factories for purchase of more up-to-date plant, for improvements in amenities for the workers and for technical developments. Only in this way will we get the concentrated and continuous attack on exports which we need for our survival.
If therefore we are to make the most of the opportunity which devaluation offers us to restore our industrial position in the world— and this may well be the last chance we shall have—the Government must face up to the economic facts of life, adopt realistic and busi- nesslike policies and remove the shackles which fetter us all. It must inspire us to greater effort, and if such inspiration is to be successful it must give us all incentives, without which in- spiration will be merely a pious hope.
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