- There are many government initiatives to support businesses
- The UK government supports small businesses by offering New Enterprise Allowances.
- These aim to:
- encourage more people to consider becoming self-employed as a way to get back into work
- encourage entrepreneurs, employers and retired professionals to consider volunteering as a business mentor
- NEA is now defunct
- The government has a new infrastructure and projects authority they are the centre of expertise for infrastructure and major projects
- They support the successful delivery of all types of infrastructure and major projects; ranging from railways, schools, hospitals and housing, to defence, IT and major transformation programmes.
- They work with the government and industry to ensure infrastructure and major projects are delivered efficiently and effectively and to improve performance over time.
- The government has a department for Environment, Food and Rural Affairs (DEFRA)
- They are the UK government department responsible for safeguarding our natural environment, supporting our world-leading food and farming industry,and sustaining a thriving rural economy.
- Their broad role means they play a major role in people’s day-to-day life, from the food we eat, and the air we breathe, to the water we drink.
The Environment Agency
- The environment agency was established under the Environment Act 1995 to act as a regulator to make sure the law is adhered to by businesses.
- Free and fair trade is fundamental to the prosperity of the UK and the world economy.
- It leads to higher wages and ensures more people can access a wider range of goods and services at a lower cost, making household incomes go further, especially for the poorest in society.
- The UK’s trade with the world is equivalent to over half of the country’s GDP>
Impact of government policy
- School curriculum boosts interest in business operation
- Television programmes such as Dragon’s Den have also encouraged public enthusiasm for running a business
- Successful enterprise culture with many small or medium businesses (SMEs) is very positive for the UK economy and the government work to encourage that
- Regulators are appointed by governments
- Regulators are tasked with monitoring and regulating prices
- Maintaining high standards of customer service
- Opening up markets to competitive forces
- Major infrastructure challenges listed by the government:
- Smart Power
- Transport for a World City
- High Speed North
- Connected Future
- Partnering for Prosperity
- Data for the Public Good
- Infrastructure changes typically require large up-front investment followed by a long period in which these costs are repaid by taxpayers.
- The National Infrastructure Commission (NIC) was established in 2015 to assess the UK’s long-term infrastructure needs and provide advice on how to meet these needs.
On international trade
- International trade is vital for the UK’s prosperity.
- The EU used to be the most important international trade party that the UK was a member of, however after leaving the EU, the UK has had to scramble to create new agreements.
- In 2018, the EU accounted for 46 percent of UK exports and 53 percent of UK imports, so the impact of Brexit was significant and required much reshuffling
Practice exercise 2
An enterprise is a business, started by an entrepreneur with the aims of producing profit
An entrepreneur is “an educated risk taker”, who starts a business by investing their time and money.
Successful entrepreneurs are willing to take risks but also use their own knowledge and understanding to ensure all risks are taken with caution and prior consideration.
Taking risks is vital to developing a business because without taking any risks you cannot —
Government policy offers subsidies to new enterprises to help them covers their startup costs. This leads to businesses being more likely to succeed, and entrepreneurs to be more likely to make the decision to start a business. Similarly, by providing business advisers for free, entrepreneurs without formal training or skills can consult with somebody to ensure they are making the correct decisions.
Regulators operate in water, industrial manufacturing and telecommunications industries, as well as many others.
Regulators can intervene by fining a company that has violated a regulation, creating a financial incentive for companies to follow regulations. In more extreme cases, regulators can also split companies up into smaller, competing companies to prevent monopolies or duopolies. This ensures markets do not stagnate, and consumer choices are preserved. Some regulators also create artificial competition by imposing tariffs and taxes to give competitors an advantage over a dominant player, forcing actual competition.
Infrastructure refers to the basic resources provided in an area such as water, electricity and internet.