Business groups welcome SME Survival Package
Business groups have welcomed the Government’s package of measures to help small firms survive the economic slowdown.
The support package, unveiled by recently appointed Business Secretary Peter Mandelson, focuses mainly on preserving cashflow and access to finance for SMEs.
The support includes a commitment to get government bodies, such as NHS trusts, local authorities and other public sector employers, to pay SME contractors within ten days, rather than the current 30. This ten day pledge takes immediate effect within central government departments.
The Government is also offering free financial guidance for businesses from the Institute of Credit Management on invoice chasing, debt management and credit insurance, and has launched a £350 million training fund to help small firms improve employee skills.
British Chambers of Commerce head of policy, Chris Hannant, said there needed to be a clear and long–term strategy for the numerous Government ideas which are now being considered.
“Small businesses are a major part of our economy and they play a big role in the community so we need to support them. Cashflow and confidence are the two key issues for businesses during a downturn, so a set of lasting policies that reflect these are essential.”
Confederation of British Industry (CBI) deputy director–general, John Cridland, said that speeding up payment times would improve the “cashflow lifelines on which businesses depend”.
“Steps to improve the flow of finance to small firms, especially money needed for investment, will be very important for those feeling the squeeze on credit,”.
Forum of Private Business chief executive Phil Orford praised the Government for putting together a “useful” raft of initial measures.
“Improving credit management skills and other training is particularly useful for helping small businesses negotiate their way through the downturn,”.
Business groups have also outlined their support for Conservative Party leader David Cameron’s demands for a six month VAT reprieve for small firms, along with a 1p cut in National Insurance Contributions (NICs) for businesses with fewer than four employees. The Conservatives said their proposals could save businesses up to £600. Federation of Small Businesses chairman John Wright said:
“A VAT holiday would provide welcome relief to the UK’s 4.7 million small businesses which are struggling with rising costs. We know that 90% of all employers have fewer than four members of staff, so the plans to cut their NICs will help shore up vital funds.”