Government could do more

Government has shown a lack of leadership in dealing with rioters and their impact on business

By Michelle Perry | Published 12:24, 12 August 11

GovtCompanies this week broadly welcomed prime minister David Cameron’s short term plan – albeit a delayed reaction from the country’s leader – to boost business in the wake of the riots across London. But many business groups want the prime minister’s coalition government to be clearer on the long term plan for growth.

The riots may have rightly distracted many this week from the government’s vague business strategy but not for long. The British Retail Consortium says the short-term help for affected businesses and high streets needs to be followed up by a long-term plan of action to revitalise urban shopping areas.

BRC Director General Stephen Robertson biggest concern is that “otherwise successful retailers are pushed into insolvency by the events of this week”.

“The retail sector has been battling difficult trading conditions for much of this year and sadly for some shops these attacks will be the final straw. Even where shops do manage to stay in business it is likely not all jobs will survive,” Roberston added.

Business leaders have however praised the temporary suspension of business rates for affected premises, but said the government should go further by agreeing to a national insurance payments holiday for riot-hit retailers.

But there’s clearly more the government could do to help business even if these riots had never occurred. And indeed more pertinently the social upheaval that occurred this week in many major cities may arguably never have escalated to the extent it did had the government taken more robust measures to help businesses grow and hire more people, particularly young people.

How about a temporary or even permanent drop in VAT back down to the previous rate of 17.5 percent? That would help both embattled retailers and cash-strapped consumers, and show clear support.

This should be a stark warning to the government that businesses, large and small, won’t tolerate further ambiguity on economic recovery.

The Association of British Insurers revised its estimated figure of claims likely to be paid out by the insurance industry to be in excess of £200 million. At a time of such great uncertainty businesses need a strong leader; a trait that – despite Cameron’s grand words in his marathon speech to an emergency session of parliament on Thursday – has been severely lacking in this government.

The lack of leadership was further reinforced on Friday when Sir Hugh Orde, president of the Association of Chief Police Officers and one of Britain’s most senior police officers, defended forces’ handling of the riots, following Cameron’s criticisim of the police, and dismissed the role of politicians as an “irrelevance” in bringing them under control.

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