SMALL business groups in the region gave a muted thumbs up to the Pre-Budget Report (PBR) but pointed to a number of ‘missed opportunities’ which they say could have helped recovery from recession.
Two tax benefits – an indefinite extension of the Time to Pay scheme, which allows small firms to spread their tax payments, and deferring the 1p rise in small companies’ Corporation Tax – were welcomed by the Federation of Small Businesses (FSB) and the North East Chamber of Commerce (NECC).
Chancellor Alastair Darling also extended the threshold for empty property relief on commercial properties with a rateable value below £18,000 to 2010-11, exempting around 70% of all empty business buildings.
NECC chief executive, James Ramsbotham, said: “NECC urged Mr Darling to keep Time to Pay measures in place and not to reverse relief on empty property rate and he responded by keeping both in place. In addition, freezing plans to add a penny on corporation tax for small businesses is timely.
“But, this was very much a ‘borrow now, pay later’ announcement which, while it is welcome that the Chancellor hasn’t hit businesses with a wave of new taxes, will still leave underlying nervousness about where the money will eventually be found.”
The FSB hailed the Corporation Tax freeze for 2010 as a victory for the organisation. Martin McTague, FSB North East policy chairman, said: “In the FSB-ICM ‘Voice of Small Business’ Annual Survey, 26% said a cut on this business tax would improve their economic prospects. It will also save small firms more than £300m over the next year and give them more of a chance to take on new staff.
“Whilst we would have preferred to see the Empty Property Relief extended further, we welcome the moves to extend the relief available for those valued under £18,000.”
Mr Darling also extended the £1.3bn Enterprise Finance Guarantee fund for a further year with an additional £500m in bank lending for small firms. In the region, more than £24.4m of eligible applications from 247 SMEs have been granted or are being processed. The FSB said it was vital the money reached both small and micro businesses.
“Reducing the nature of personal guarantees for this help would be a welcome start,” said Mr McTague. “The Government has missed a chance to really tackle a difficult credit market by failing to create more options for access to finance and more competition among high-street banks.
“They should have addressed this challenge and looked at options, such as a regional stock exchange, to help small and fast-growing businesses capture finance.”
The NECC also criticised Mr Darling for shying away from big decisions.
Referring to the Chancellor’s decision to reduce bingo duty, Mr Ramsbotham said: “We needed much more than a Bingo Budget to make sure that the economy grows strongly in 2010.
“Mr Darling announced some good numbers but this was far from a Full House.”
The Government has missed a chance to really tackle a difficult credit market