Firms blame Government for Downturn

Government to Blame For Economic Downturn

The overwhelming majority of SMEs feel the Government is to blame for the economic downturn, according to mutual association for lawyers and chartered accountants UK200 Group.

Government to Blame For Economic Downturn

The UK200 Group survey of 200 small businesses across the legal, retail and manufacturing sectors revealed that 90% felt that the Government was responsible for the economic downturn.

A high number (85%) also blamed the banking industry, while 73% pointed the finger at the world economy and its contribution to the UK slowdown. UK200 Group president David Ingall said;

“It is interesting to note that small firms are very clear about who they hold responsible for the current difficulties, although the media must take some responsibility for constantly headlining bad news,”

The research also highlighted that 88% of small firms said the economic downturn is hitting their levels of business, with 72% forced to reduce their margins as a result.

“This survey provides concrete evidence that the credit crunch is really hitting UK SMEs, the backbone of the economy, and hitting them hard,” said Ingall.

“The perception amongst the businesses we spoke to is that the Government is not doing enough to help and is instead letting market forces take their own course,” he added. “The Government needs to be listening – and talking – to smaller firms as part of its overall plan of action for turning the economy around, otherwise it may be too late for many businesses to benefit from a future recovery.”

Responding to the criticism, an HM Treasury spokesman said that the Government recognised the difficulties faced by small businesses, but emphasised the global nature of the downturn.

“There is no doubt that the global shocks of the credit crisis and a doubling of oil prices are delivering the toughest economic challenge for decades, affecting every country in the world including the UK,” he said. “While our economy is well placed to adjust to these shocks, we recognise that many small–business owners are experiencing difficulties after a decade of record growth and low inflation.

“To support small businesses we acted in the Budget to increase finance available for start–up and growth – including increases to the Small Firms Loan Guarantee Scheme, and Enterprise Investment Scheme – and have delayed the scheduled increase in fuel duty to help with higher fuel bills,” he added.

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