Why business is good for our nation’s health
Profit doesn't have to be a dirty word, writes Carl Richardson, partner at Richardsons Capital LLP.
It is summer 2023 and here is a snapshot of business in the UK.
Our country’s economic growth can be described as sluggish at best and businesses are grappling with a host of inflationary pressures and rising costs.
Hence, the private sector would likely welcome any initiative that aims to help, and to bang the drum for the role business plays in our society as a force for good.
In that context, the launch of a new independent charity, The Jobs Foundation, is certainly welcome.
Put simply, businesses – and the jobs they create – underpin our whole society through the taxes they generate. These funds are levied into the public purse and are used to pay for public services such as schools, hospitals and social care, that people from across society then access throughout their lives.
A core aim of business is to create wealth. While the notion of a ‘profit’ can sometimes be regarded as a dirty word, surely this should not be the case when results are delivered in a responsible manner?
Rather, profitable businesses, conducting themselves in an ethical way, ought probably to be applauded for the wealth they are creating and the associated benefits that are generated for people, our society and Great Britain as a result. After all, profits are not a foregone conclusion for the risk-takers and many a business has suffered a loss.
Wealth creation is just one reason why the message the Jobs Foundation will aim to promote – that of business being a force for good – is so important. Does it not therefore sound like an excellent idea to inspire future generations to want to get into business, to become entrepreneurs and to change the world in ways that the likes of Elon Musk are doing at present and others have done in the past?
You certainly do not have to look far in the West Midlands to find such inspirational figures. Industrialists such as James Watt and other members of the Lunar Society developed innovations in the 18th and 19th centuries that changed the way business was done and in turn transformed the world. They paved the way for the creation of millions of jobs, ultimately helping to improve standards of living across society.
It was with good reason that Birmingham was known as the ‘workshop of the world’ and the Black Country as the area that produced the spark that lit the Industrial Revolution.
Today, businesses come in many shapes and sizes, with small and medium sized enterprises continuing to make up the bulk of the UK’s economy and workforce. The Institute for Family Business estimates that family-led businesses, such as our own, employ over 14 million people in the UK. In turn these businesses contribute over 25 per cent of the country’s GDP and pay nearly £200 billion every year to the Government in the form of tax, which in turn funds everything from new warships to the NHS.
Our own family concern was born in the Black Country, and has now evolved into an international business. Yet we remain proud of the efforts we are involved in to create jobs here and across the UK. One such example of creating economic activity is the West Midlands Designer Outlet in Cannock, developed in conjunction with our partners McArthurGlen, which has been a popular hit with shoppers since it opened in April 2021.
Our marvellous £150 million centre has created more than 1,000 jobs. With over three million people visiting it every year, the project also provides a significant boost to the wider regional economy.
Plans are now being developed for a second phase of development. This would almost double the size of the retail and leisure offering, create hundreds of additional new jobs for people living in the area, and, of course, generate additional taxes such as National Insurance, business rates and corporation tax.
So, why are jobs important for their own sake?
Fundamentally, they remain the route out of poverty for millions of people. An independent body called the Social Metrics Commission has found that securing a full-time salaried job reduces the risk of falling into poverty by 90 per cent. Being in employment has two significant social benefits. Firstly, having a productive and meaningful job helps people to learn and develop new skills, afford a better standard of living (and of course, pay tax). Secondly, having a consistent income and work routine also helps to improve people’s mental health and wellbeing.
Unfortunately, too many people across the country are out of work. Latest figures from the office for National Statistics (ONS) show that while employment rates in the UK continue to hold up well, there are still 10 million people aged between 16-64 who are either unemployed or economically inactive. Here in the West Midlands the unemployment rate is 5.1 per cent, significantly higher than the national average of 3.8 per cent.
Jobs matter and there remains work to do on that front. Having a new organisation such as the Jobs Foundation reinforces the point to government, the media and the public. Is it not the case that this is a good thing for individuals, businesses and ultimately the wider economic health of the nation?
