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Don’t Cut Small Businesses Support

02 Nov 2009

The government must not sacrifice its support for small businesses


The government must not sacrifice its support for small businesses as part of widely-anticipated spending cuts to plug the gap in public finances, the Forum of Private Business (FPB) is warning. The forecast for public sector net borrowing by the end of 2009 is £185 billion, meaning substantial spending cuts will be required.

In view of this, the FPB has submitted its proposals for ‘responsible growth' ahead of the Pre-Budget Report, which is expected to take place in November. Measures include improving existing support schemes, reducing small firms' corporation tax, tax incentives for micro-businesses recruiting staff and introducing a comprehensive regulatory review.

The FPB's Policy representative, Matt Goodman, said: "There is still a difficult road ahead. Government cuts should not include those programmes that are making a real difference for struggling firms. The next 18 months will be crucial. As the main drivers of growth, small businesses need to be placed at the heart of plans for economic recovery so they can make the most of future opportunities. At the same time, the government will have to consider the impact of recession on public finances. We believe our proposals are a cost effective path to responsible growth."

The FPB is concerned that support programmes such as the Enterprise Finance Guarantee (EFG) and Trade Credit Insurance (TCI) top-up scheme, both of which have been extended recently, could be cut back in the name of fiscal responsibility. Despite many commentators predicting the economy had already come out of recession, the latest figures show that GDP has fallen by 0.4%. Far from reducing the support that is available, the FPB believes that more must be done to help struggling small businesses survive and plan for the future. Research carried out by the FPB shows that confidence among small businesses is high, but tempered by fears over finance and cash flow.

News source: Courtesy of Glass & Glazing Magazine