Government measures including VAT cut not helping SMEs
According to the Federation of Small Businesses (FSB), Government measures including the recent cut in VAT is having little or no impact at all.
The FSB said a survey of thousands of small-to-medium businesses (SMEs) revealed that Government measures aimed at improving trade and guaranteeing bank lending are not working.
The poll found that more than half had experienced a decline in trade in the last two months, despite a cut in VAT from 17.5% to 15% last December in an attempt to boost spending.
The Enterprise Finance Guarantee Scheme (EFG), announced by the Government earlier this year was introduced to support £1.3 billion of new loans – between £1,000 and £1 million – available to businesses with a turnover of up to £25 million.
However, a separate survey by the FSB established that only 8% of those questioned said that their banks were making funds available to them via the EFG.
According to John Wright at the FSB, more action needs to be taken by the Government to ensure businesses can survive the economic downturn.