TNCs are facing a crunch and it’s hard to blame them.
TNC businesses are facing the prospect of a significant financial hit, with earnings expected to fall by more than 15 per cent in 2017/18.
The number of TNC-owned businesses has fallen by more at the UK level than at any other point since the financial crisis, with businesses that were previously thriving now in crisis.
In a report by the CBI, the UK government, the Bank of England and the UK Chamber of Commerce estimated that, at the end of 2021/22, the number of small businesses with fewer than 200 employees would be 3,800 fewer than it was at the start of the crisis, and that by 2020, the figure would be less than 1,000.
Small business is the core of the UK economy, but there are currently only around a dozen of them in England, Wales and Northern Ireland, and the number is falling fast.
A significant portion of these losses are being borne by the smaller, regional TNC companies.
Small businesses are a key part of the economy, with an estimated 7 million working people working in the sector, including nearly 7 million in the UK.
As a result, they are increasingly at the centre of the debate around the future of the British economy, which is shaping up to be the most important question facing the Government this autumn.
The TNC business model is the cornerstone of the business sector in Britain, with the majority of those jobs being directly generated by small businesses.
But what happens when the business model collapses?
TNC employment has been declining for years, from a peak of over 8 million in 2013, but it was only in the last few years that TNC employers started to experience real job losses.
In 2015/16, the TNC industry saw a massive drop in its earnings per share, with annual growth of just 0.1 per cent, compared to a 3.5 per cent rise for the UK overall.
This has meant that the UK has experienced its worst economic downturn since the Great Depression.
What could the Government do to stem the decline in TNC jobs?
A series of policy changes will help, with some of the biggest ones being the introduction of the Business Rates (Budget) Charge, which would be applied to the gross value added (GVA) of businesses in the TNR, and would take a 20 per cent hit to the businesses’ profits.
The Budget Charge would help reduce the financial burden on businesses by reducing the amount of money the Government pays out to the TNS.
The Government has been trying to lower the Budget Charge by increasing the amount it pays out in interest, which was initially £6bn in 2020/21, and then £4.5bn in 2021/02.
In order to maintain its position as the UK Government’s most profitable employer, it needs to reduce the Budget Rate in order to keep businesses afloat.
There are also several policy measures the Government can take to ensure that the economic outlook for TNC firms is as good as possible.
Firstly, it should make it easier for small businesses to borrow.
The Financial Services Compensation Scheme is the best way to help small businesses, with up to £10,000 of loan-to-value and up to a 30 per cent discount on a loan that is due to expire.
This is a great way to protect the most vulnerable customers from the impact of a downturn in business, and will help ensure that businesses can keep borrowing.
A number of local authorities have already made this an easy process for small business, with loans up to 15 per-cent lower than normal and interest rates of 0.25 per cent lower than average.
It is also important to encourage investment in the local economy, as it is the key to making a difference to the UK and global economy.
There is also a small but growing trend to raise the minimum wage in an attempt to help boost demand in the economy.
This could help to help companies compete with the cheaper costs of doing business in other parts of the world.
The government should also continue to support businesses with an extra set of incentives for investment in infrastructure.
This includes funding the construction of new factories, and encouraging businesses to create more jobs in local communities.
The biggest policy change that the Government needs to make to make TNC growth sustainable is to increase the minimum living wage to £7.50 an hour by 2021/23.
This would help to protect businesses from the financial pressures of an ageing workforce, as well as incentivising them to invest in infrastructure, in order not to go bust.
In addition, the Government should make sure that TNSs are allowed to continue operating in their current form, with a cap on the number they can employ.
This will ensure that there is a minimum level of safety for TNS employees, and ensures that businesses do not face a financial hit if they shut down.
It will also encourage the Government to make further changes to the
