Make business rate relief automatic and extend lending scheme
The government has been called on to do everything it can to help business in the forthcoming pre-Budget Report.
The British Chambers of Commerce (BCC) has set out its short- and medium-term proposals for sustaining economic and business recovery, and the measures it would like to see the Chancellor address.
The BCC said that the Enterprise Finance Guarantee scheme, which has helped firms at the margins of bank lending during the downturn, should run beyond March 2010.
To ensure that more SMEs receive the relief to which they are entitled, the government should make Small Business Rate Relief payments automatic.
Given the challenges facing retailers and small firms during the busy Christmas period, the government should also delay the reversion to the 17.5 per cent rate of VAT until Monday 4 January 2010. This would give small firms an essential weekend to prepare.
Additionally, the BCC wants the Bank of England to raise the quantitative easing ceiling to £200 billion and to purchase more company debt in an effort to boost banking liquidity and small business lending.
In the medium and longer term, the government should maintain investment in the transport infrastructure, the BCC said.
The planned rise in employer National Insurance Contributions should be dropped, and the shortfall made good through public sector spending cuts and changes to public sector pensions.
There is also, the BCC argued, a need for new-generation Enterprise Zones where businesses can benefit from reduced regulation and, possibly, lower taxes.
David Frost, the BCC’s director general, said: “With many businesses, and particularly small firms, still experiencing access to finance problems, there is clearly a need for the government to continue with measures that boost money supply. Extending good initiatives like the Enterprise Finance Guarantee scheme, and expanding the size and scope of the QE programme will help.
“Once out of recession, government must allow the private sector to continue driving recovery, by maintaining spending on vital business infrastructure, removing tax and regulatory barriers to growth, and refocusing our economy from public spending and consumer debt to trade and enterprise.”