By Daniel Hunter
Ahead of the 2012 Budget announcement online marketplace eBay has revealed that over a third (39%) of online businesses believe temporary tax cuts should be the Government’s top priority in 2012 to boost growth.
With one fifth (23%) putting the development of direct Government lending to small businesses high on the agenda.
The news comes just a week after Business Secretary Vince Cable floated the idea of turning bailed-out Royal Bank of Scotland into a dedicated lender for British businesses.
Despite being preoccupied with the current level of taxation, a survey of more than 1,000 businesses has shown that almost three quarters (74%) are confident about their own business prospects for the next six months, and over half are pleased with the Coalition Government’s efforts in cutting the deficit (57%) and reducing public spending (54%).
Although businesses are generally confident about their own financial prospects, they are more gloomy about the economy as a whole, with almost half (42%) of businesses questioned saying they are more worried about the risk of a double dip recession than they were six months ago.
In 2010 — when unemployment peaked at a fourteen year high of 2.51 million — a similar percentage of businesses (37%) were concerned about a double dip recession, showing that five years after the start of the global financial crisis the state of the economy has not improved significantly.
Other major concerns for businesses over the next year include low consumer demand (87%), inflation (76%), and the collapse of the Eurozone (69%) owing to the knock-on effect it will have on consumer demand across Europe, the export market and banks’ ability to lend.
Less than a third (30%) of businesses questioned approve of the performance of the Coalition Government in working with European Governments to support the Euro; and of the businesses that consider the potential collapse of the Eurozone as a key concern, two thirds (62%) are high exporting businesses that have expanded their sales overseas in an attempt to grow.
“Businesses hold the key to economic growth in the UK, and the Government must ensure that they are doing all they can to advise and support them during this tough time," Angus McCarey, UK Retail Director, eBay, said.
"According to our research, 60% of businesses have exported more since 2007, and cross-border trade represents a massive economic opportunity. As well as ensuring the foundations are in place — including better access to finance and tax cuts to ease pressure - policy-makers must do their part to ensure businesses are able to reap the rewards of international expansion with our European neighbours as well as further afield.”
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