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Well Done, George!

Posted on Dec 06, 2011 by Sandy Finlayson  |

I may be one of the few to laud the Chancellor for his recent Autumn Statement. While the chattering classes in the media choose to talk only about the “dark side” he has at least been honest enough to recognise that the country has economic problems and that the short and medium term outlook is a bit “difficult”.

Within the serious constraints imposed upon him, he has also shown that he has finally “got it” and is doing what he can to re-allocate capital towards re-building the battered economy. 

While jobless growth remains the wholly grail of big business, it does not take a rocket scientist to work out that the only real chance of recovery lies in primary investment in high growth young companies which might just form the foundations of the great businesses of tomorrow. 

It would clearly be political suicide to dispense with the 50% tax rate in a world where Barclays see fit to allocate £5 Billion to banker’s bonuses, he has at least done what he can to make early stage investment a much more compelling proposition through the substantial enhancement of EIS relief.

Since the announcement a week ago I have already had four enquiries about creating new EIS syndicates or funds to facilitate more investment in this area. The banking system and the finances of many western governments may still be in a complete mess but the world is awash with capital. 

All we need to do is re-engage that capital with enterprise and innovation to create a brighter future for everyone. The devil will be in the detail of the new draft legislation which has just been published today but the Chancellor has sent a very positive signal about the right direction of travel for policy in terms of supporting new business creation. 

I am greatly indebted to our Company Secretary, Ross McGregor, for his many pearls of economic wisdom including the following piece of completely faultless logic:-

“An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on Obama's plan".  All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.

Could not be any simpler than that.

Remember, there IS a test coming up. The 2012 elections.

These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Can you think of a reason for not sharing this? Neither could I.

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