By Claire West
The Federation of Small Businesses (FSB) has written to the Chancellor ahead of the Autumn Statement, to be delivered on 29 November 2010 to highlight the strategies that will deliver a stronger economy through small business growth.
It is the UK's 4.8 million small firms that are key to a private sector led recovery as they will boost tax revenues and employ the unemployed. The letter, delivered to the Chancellor this week, sets out clear and comprehensive strategies which will allow the small business community to employ and invest.
The FSB suggests that in the short-term (within the next two years) the Government should expand the current National Insurance holiday scheme to existing micro businesses and that it must place a moratorium on the introduction of business regulation.
In the mid-term (by the end of this Parliament) the FSB looks to Government to permanently reduce VAT to five per cent in the construction sector for maintenance and home improvement works. It has been estimated that this could boost Treasury coffers by £1.4 billion.
It is also imperative that by the end of the Parliament that the Government creates more competition in the banking sector, be that through helping smaller banks get a foothold within the UK branch network, providing alternative sources of finance for small businesses to become 'investment ready' and simplifying the process of accessing state funded venture capital funds.
The long-term priorities must focus on areas which are important to the future growth of the UK economy; capital spending on transport, moving to a low-carbon economy and rolling out high-speed broadband are three areas which the FSB considers to be of significant importance.
John Walker, National Chairman, Federation of Small Businesses, said:
"Our letter provides a snapshot of the measures the FSB would like to see the Government introduce or review in the next Budget in March 2011.
"Over 80 per cent of the jobs created in the EU between 2002 and 2007 were in small and medium sized businesses, showing the potential for growth in this sector. Yet, recent figures from the FSB 'Voice of Small Business' Index showed that one in 10 firms expect to decrease employment in the final quarter of 2010 as business confidence remains muted.
"Small businesses can deliver the growth to achieve a private sector led recovery, but the Government will need to play its part in triggering and nurturing this process"