Everything But The Weed

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The private sector has called for Government assistance, after their businesses have been adversely affected by new Government policies. George Osborne has been urged to include policies in his budget this year to make life easier for struggling firms, such as the inclusion of protection for UK businesses from future Government policy changes as the private sector is already crumbling and cannot take anymore knocks.

One such new Government measure, which is claimed to be helping bring our economy back to a state of recovery, is the increase in VAT to 20% as of April, which is costing British firms an additional £12 billion a year. Towards the end of 2010, the minimum wage was also increased, meaning firms had to cough up an additional 2.2% increase on staff who were earning the minimum wage. Further increases have been discussed by the Government on National Insurance rates, and rates for businesses. To top it all off, the Monetary Policy Committee have confirmed that interest rate increases are inevitable towards the end of 2011.

Interest rates will also increase towards the end of this year it has been announced by the Bank of England, so the concern is that a rise in interest rates will again hit small companies who are lucky enough to have commercial mortgages, as repayments will increase.

Rises in taxes (including the bank levy and VAT) and austerity spending cuts have already been introduced by the Government to try and cut Britain’s record budget deficit.  These have already had a harsh impact on many businesses.

Another concern of the small business sector lacking in growth is that this will cause employment levels to stand still, as slow expansion and growth will mean there will not be a need for additional staffing. This is one reason that it would appear sensible of the Government to cut smaller firms some slack to allow a quicker recovery.

The Chancellor has been issued with a plan from the British Retail Consortium to request that more help is offered to the retail and private sectors as a whole, including more notice before minimum wage increases and a suspension of the new fuel duty which is planned to come into effect in the new tax year.

Paraphrasing the Chancellor’s own words, Stephen Robertson, director-general of the BRC, said: “Retailers accept ‘we are all in this together’ but they are already ‘in this’ more than many. The sector is not asking for handouts but is saying any new impositions will undermine its ability to maintain and create jobs, costing the Exchequer.”

The manufacturing sector have also called for assistance by asking that the Government clearly sets out their plans for the growth of the economy to allow businesses to be more prepared, and to increase interest in their sector to aid its revival.

Since the market crash, small business have suffered especially, since it has become more difficult and nigh on impossible for some to obtain corporate finance including commercial mortgages, and those who can obtain a mortgage simply struggle to afford repayments, as their company’s growth suffers instead.

Without the ability to obtain credit, new and small businesses are unable to expand, and expansion includes the employment of new or further staff. It is therefore being called that the Government address the lack of assistance from banks to ensure that businesses are still able to grow if our economy is to recover at all.

Howard writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.