Small Businesses Want Deficit Cut

According to new figures from the Federation of Small Businesses (FSB) as many as three quarters of small businesses want the Coalition Government to cut the public deficit.

The Voice of Small Business survey found that 74% of small businesses polled think that the Government should cut spending.

Data from the Office of National Statistics put the public sector net deficit at currently £823.3billion, or 56.3% of GDP (at the end of August 2010), and it is that huge debt that worries UK SMEs.

The FSB is concerned that too much is spent on business support with only five percent of that funding going to micro firms (usually a firm with fewer than 10 employees). The FSB recommends that the Government cuts the business support budget to £500 million and concentrates the spending on business support for micro businesses and a fully-operational web portal.

Access for SMEs to finance systems is another area where the FSB are concerned – the business group believes that the focus be on ensuring that banks meet demand for small business loans and funding. Capital for Enterprise Ltd (CeFL), the business venture capital company run by the Government, they believe, should be privatised, saving taxpayers a further £2 million in running costs.

In addition the Federation of Small Businesses want the Government to guide the recovery with:

  • Extending the National Insurance Contributions holiday to existing small firms. Currently the initiative is only open to startups. (See National Insurance Exemption Begins for Start-ups)
  • Providing reliable fast broadband. Ensuring small businesses get online could create 600,000 new jobs.
  • Ensuring that small businesses are aware of the Small Business Recruitment Service available at Job Centre Plus.
  • Increasing the VAT threshold to £90,000 could save UK SMEs up to £162 million every year.

John Walker, National Chairman, Federation of Small Businesses, said:

“The Government has said it wants the recovery to be enterprise led, and while small businesses have said they want to see the Government tackle the public deficit, business and economic growth must be a priority. We have heard time and time again that small businesses are the drivers of the UK economy and the job creators of the country. And the 4.8 million small firms truly are – employing more than half of the private sector workforce.

“We all know we are living in an age of austerity which will affect us all and that tough decisions must be made in the Comprehensive Spending Review, but we will be telling the Conservative Party Conference that small firms need the right measures in place so they can fulfil their role as innovators and job creators. Small businesses are the sector to aid recovery and must step up – but so must the Government."

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