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Robert Downes

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Autumn Statement: Will George Osborne Give Small Business the Christmas Present it Wants?

Posted: 29/11/2011 00:00

All eyes will be on the Chancellor at 12.30pm today when he makes public his Autumn Review statement.

Small business may well be hoping for an early Christmas present from Mr Osborne, but just how deep is his Treasury sack? He has a fine line to tread and not much wriggle room in which to do it.

On the one hand he has to demonstrate to the international money markets that the government is serious about deficit reduction. On the other he needs to breathe some life into a stalling economy.

There's no doubt the government will have some big news announcements to make, but how big will the kick-start be and what form will it take?

Earlier this month the Forum submitted its 'wish list' to various senior ministers: the Business Secretary Vince Cable, Small Business Minister Mark Prisk and the Chancellor himself. The correspondence sets out a number of proposals that the Forum thinks could put the UK economy on the road to recovery in the new year.

Crucial areas where action would help deliver the growth the economy so desperately needs include education and training, export, tax, finance, and bank lending.

Key points in the Forum's letter included a greater focus on schools to improve pupil employability - employees need work ready recruits. There also needs for a greater business voice in how the government's skills money is spent - employers are eager for either a voucher scheme for skills training or NI reductions for apprentices.

Additional support from government on raising awareness of the benefits of exporting, particularly for firms seeking to export for the first time, would also be welcome. In fairness, this was partly addressed by government in its new Finance Fitness scheme - but there's much more to be done to help small businesses 'go global.'

Rural businesses also require more help, such as shared banking services where counter services are diminishing. Freezing fuel duty, if not reducing it, would also help not just rural business but the wider UK economy at all levels. Nothing less than suspending next year's two planned increases will do.

Our letter also asks for business rates to be frozen in April. Businesses face a frightening annual jump of 5.6% - the biggest in 20 years - with the government set to use September's RPI figures to set April's rates rise. This would be devastating.

The Forum is also asking for greater powers for the Groceries Code Adjudicator to help them tackle big retailers who treat suppliers unfairly. Proper punishment would include serious fines for offenders from the outset, not just a slap on the wrist.

Further, we are calling for tax breaks for private lenders, as well as plans to ease tax on equity investors, which would ease improve the lending landscape for small firms. Clearly, the government needs to do more to increase confidence in alternative sources of finance, particularly for lower-turnover businesses.

This is a big wish list, but these are the key issues our members regularly tell us are affecting their ability to trade profitably.

If trading conditions for smaller businesses do improve, the Forum believes the SME sector will be able to deliver growth for the wider UK economy and provide much-needed jobs to rein in spiralling unemployment.