SMALL FIRMS today called for a national insurance holiday and a greater focus on cutting red tape as they fight their way out of recession.
Some 41 per cent of firms surveyed by BDO and the Quoted Companies Alliance said reforming equities regulation could help them access finance to grow. The most popular reform would see AIM-listed shares included as ISA investment options.
A holiday from employers’ national insurance contributions – the so-called tax on jobs – was seen as the best pro-growth idea by 22 per cent.
And 93 out 113 respondents said the government, through Vince Cable’s Department for Business, Innovation and Skills (BIS) wasn’t doing enough to cut red tape, BDO told City A.M.
However a BIS spokesperson said the government’s efforts are already helping. “We are running the red tape challenge to scrap or simplify regulations. Around 1,900 regulations have been examined, over half of which will be scrapped or improved,” the spokesperson claimed.
Other data out today highlighted the squeeze small businesses were finding themselves in even as the recession came to an official end. Twelve percentage points more small businesses were pessimistic about the business situation in the UK, than said they were optimistic, according to data from the Confederation of British Industry, only a very slight improvement on July when the net balance was minus 13 per cent. Fifty-eight per cent of firms said they were working below capacity, and capital expenditure on buildings, plants and machinery was all forecast to shrink – though at a slower rate than three months ago.
And data from Syscap implied the government’s Funding for Lending Scheme was failing to ease credit conditions. The average interest rate on a new bank loan under £1m rose from 3.76 per cent in the second quarter to 3.85 per cent in the third quarter.