Small businesses call for a programme for growth

The Federation of Small Businesses has urged the Government to put in place a Small Business Programme for Growth to help them create more jobs and boost the economy in the light of the Spending Review.

The Federation of Small Businesses has urged the Government to put in place a Small Business Programme for Growth to help them create more jobs and boost the economy in the light of the Spending Review.

The FSB says that the missing link in the Government’s deficit programme is the need to create growth – increasing the tax base, creating more businesses and incentivising small firms to grow and innovate. 

A Programme for Growth is even more important, it says, given that latest FSB research shows that 10.4 per cent of firms expect to decrease employment over the next three months as business confidence in future prospects and revenue growth weakened over the July to September period.  

It adds that a Programme for Growth aimed at small firms will be very relevant given that more than 80 per cent of jobs in the EU were generated by small businesses between 2002 and 2007. 

The FSB says such a programme should include:

An extension to the National Insurance Contributions holiday to include existing firms with up to four members of staff and provide incentives when they take on three new employees – funded by scrapping the £1 billion Regional Growth Fund

– A cut in VAT to five per cent in the construction sector to help create jobs and stimulate the economy, but also increase revenue to the Treasury

– A cut in the business support budget to £500 million and concentrate spending on genuine business support for micro businesses and a fully operational web portal

– A business-led National Mentoring Service to be created through the Institute of Enterprise and Entrepreneurs to match mentors with businesses with backing from the banking industry.

John Walker, National Chairman, Federation of Small Businesses, said: "The small business community continues to have a vital part to play in driving a credible recovery and taking on new members of staff to help tackle unemployment, so it is now vital the Government puts a Small Business Programme for Growth into action immediately. 

"Small firms are at tipping point and lack the confidence to take on the 500,000 people that will be made redundant as a result of these cuts. So it is up to the Government to incentivise the small business community – through extending the National Insurance Contribution holiday to existing firms and cutting VAT to five per cent in the construction sector – to promote growth and help small firms take on new staff."

 





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