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Small businesses want the Coalition Government to cut deficit

By CreditMan Sunday, October 10, 2010

Three quarters of small businesses think the Coalition Government should cut spending to tackle the public deficit, new figures from the Federation of Small Businesses (FSB) ‘Voice of Small Business' survey show.

The FSB will tell the Conservative Party Conference that 74 per cent of small businesses think the Government should cut public spending and six in 10 said they are more willing to accept cuts in public spending because of the size of the public sector deficit.

The FSB believes savings could be made with business support structures and access to finance systems. The FSB is concerned that too much is spent on business support yet only five per cent of that funding goes to micro firms. In this area the FSB recommends the Government cuts the business support budget to £500 million and concentrates spending on genuine business support for micro businesses and a fully operational web portal.

The emphasis on access to finance should be on ensuring the banks meet small business demand. The FSB believes bodies such as Capital for Enterprise Limited should be privatised as there are many private fund managers and management groups already providing this service. Such a move would save the public purse more than £2 million.

Turning to the economy in general, the FSB firmly believes that if the Government truly wants the small business sector to grow and take the economy back into solid recovery, it must do the following:

Extend the National Insurance Contributions holiday to existing firms: provide incentives for businesses with zero to four members of staff when they take on three more employees
Provide fast and reliable broadband: help small firms grow their business online which could create 600,000 new jobs
Promote small business services at the job Centre: ensure small businesses are aware of and use the Small Business Recruitment Service
Increase the VAT threshold: raising the VAT threshold to £90,000 could save business up to £162 million per 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 fulfill their role as innovators and job creators. Small businesses are the sector to aid recovery and must step up – but so must the Government."