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24 November 2008 Pre Budget Statement - The business reaction

Measures outlined in the Chancellor’s Pre-Budget statement have received a mixed reaction from the business community.

The Federation of Small Businesses (FSB) welcomed the creation of a temporary Small Business Finance Scheme, which will make £1billion available in loans for small firms.

FSB National Policy Chairman, John Walker, said the additional support would ‘provide a vital cash boost to businesses struggling with rising costs and a lack of credit.’

The lobby group also applauded Alistair Darling’s decision to allow small enterprises to spread the payment of all taxes to HM Revenue & Customs and offset losses up to £50,000 over the last three years.

These measures, claimed Mr Walker, will give small businesses a ‘welcome breather from the taxman and allow them to concentrate on sustaining their business, supporting their staff and growing the economy in the long term.’

However David Frost, Director General of the British Chambers of Commerce (BCC), was less complimentary. ‘If I were marking the Chancellor’s report card, I’d say “could do better”.’

‘There are a few good announcements in there [… but] the proposal to increase National Insurance Contributions is wrong,’ he asserted. ‘At the very time when the economy should be coming out of the recession, businesses will face an extra tax on employing people.’

Earlier today Mr Darling revealed that national insurance contributions would rise by 0.5% for all employees and employers from 2011, although the additional charge will not be levied on individuals earning less than £20,000.

The Trades Union Congress, meanwhile, said today’s Report represented a ‘vital and welcome contribution towards countering the recession.’