Chancellor offers finance lifeline to SMEs
Businesses are set to benefit from a credit-easing programme, while a scrapped fuel duty rise has been welcomed by logistics providers.
The news, announced in Chancellor George Osborne’s Autumn Statement, will see the planned rise in fuel duty of 3p abandoned, while a further £40bn in low interest loans would be made available to small and medium sized businesses.
A further £1bn of business finance will also be made available to secure funding for medium-sized operations, while Osborne extended the business holiday rates until April 2013
Anyone looking to set up a new business will be in luck from April 2012 – those investing up to £100,000 in a new start-up business will be eligible for income tax relief of 50%, while in 2012, any tax on capital gains invested in such businesses will also be waived, he announced.
The decision to not go ahead with a proposed 3p rise in fuel duty was welcomed by the Frieght Transport Association. Theo de Pencier, the FTA’s CEO, said: “We have avoided a horrendous New Year’s hangover; January’s rise would have cost the industry around £325m.”
Speaking to MPs at the House of Commons, Osborne said that the UK economy was now forecast to grow by 0.9% this year – compared with 1.7% forecast in March – and 0.7% next year, down from the 2.5% March forecast.
He said the plan was to protect the UK from the EU debt crisis, but added that if Europe was to slide into recession, it would be difficult to avoid in the UK.
The statement was given a cautious welcome by FDF director of communications Terry Jones. He said: “At first glance this looks like a pro-business autumn statement with a clear focus on growth.
“SMEs have repeatedly highlighted their concerns about accessing finance and we are pleased to hear the proposals for credit-easing that should enable many of our small businesses to expand, pursue new export markets and create jobs.
“The move to remove much unnecessary red tape is likely to be welcomed by the industry and we await details of where this will apply. Our members have been particularly concerned about increasing regulation on employment, so plans to exempt small employers could potential give them the confidence to consider creating new jobs.
“We are already pushed to the hilt on commodity prices and escalating energy charges so the freeze on fuel duty will ease difficult operating conditions for the industry.”
British Retail Consortium director general Stephen Robertson said: “Downgraded forecasts make it all the more vital that the Chancellor implements a credible plan for stimulating economic growth, which helps retail in keeping inflation down and generating jobs, especially for young people.
“The Chancellor has addressed a number of the concerns we raised with him. His measures should provide some help to the hardest-hit families and may go some way to reversing the trend of falling consumer spending, but the challenge for the next 12 months will be to rebuild consumer confidence and stimulate private sector investment.