The Autumn Statement of the UK budget is just around the corner, and the CBI, one of the top lobbying organisations for UK businesses, has recently called for a greater focus on growth from the government. Alongside prioritising measures that will benefit small businesses, the CBI is also hoping the budget will continue to reduce the deficit, something key to ensuring a strong UK economy moving forwards.
Ahead of the autumn budget statement, the CBI has called on the Chancellor to concentrate more on the drive towards economic growth, while still sticking to the course of deficit reduction. As well as prioritising these issues, it is also calling for the government to introduce the business banks as quickly as possible, but is warning against a reduction in pension tax relief due to the adverse effects this could have on small business owners.
There have been suggestions that the government will reduce pension tax relief which will hit small business owners who invested heavily in their companies in the early years to back-load pension contributions to the end of their lives. This reduction would also undermine the government’s efforts to encourage more people to save adequately for their retirement.
The business bank is another big issue that the CBI feels should be awarded some priority. There is a consensus emerging amongst the experts that a government business bank can help to ease the transition to create a new normal of business lending. In the light of convention bank lending letting so many small businesses down, this is exactly what’s needed. However, the success of this dedicated business lending bank will be judged on two critical factors: first, whether or not it improves the take up of existing government schemes, such as the Enterprise Finance Guarantee Scheme and the Regional Growth Fund, both of which are suffering from a lack of awareness within the small business community. Second, the business bank needs to show it is capable of plugging the gap in funding for SMEs by providing a long term solution to the credit gap as reported in the Brydon report.
So, will the statement be good news for small businesses? We can only hope.