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News - 23 October 2010

FPB is happy with Comprehensive Spending Review

The Forum of Private Business has seen some positives in the Comprehensive Spending Review (CSR) announcement.

“The coalition government has faced tough choices in implementing what were always going to be painful public spending cuts for many small businesses as well as the public,” said Jane Bennett, the Forum’s Head of Campaigns

“There were positive developments on export, inward investment from oversees and also education – including creating many more apprenticeships a new ‘work programme’ with private sector involvement. High tech industries – and the people that work in them – are extremely important for a strong economy in the future and it is good that funding for science is being ring fenced.

“However, these measures alone will not be enough to allow small businesses to substantially create employment in order to replace the 490,000 jobs that will be lost in the public sector.”

She added, “We feel that one crucial area the Government has addressed is tax. HM Revenue and Customs will be expected to find savings of 15% via new technology and other efficiencies and these are likely to include reforms to the UK’s complex tax system. This should save money for both the government and small businesses, which spend £1.8 billion every year on tax administration"

“It is pleasing the Government is investing £900 million in tackling tax evasion and fraud in order to claw back £7 billion in lost tax revenues"

“It is also pleasing that all banks will have to sign up to the code of practice on tax payment but the Government should also directly address tax avoidance carried out by big businesses, including closing the Channel Islands VAT loophole ‘low value consignment relief’. For a long time we have complained that small businesses cannot compete on a level playing field because large companies find avoiding their tax commitments is far too easy"

“On a local level the move to allow local authorities to borrow against future business rates income is likely to benefit regional economies, and infrastructure projects in particular, but it would have been better had they been able to borrow against more stable future council tax income"

“Of course, small business growth and job creation driving a private sector led recovery will also depend on further removing SMEs from taxation and reducing other costs altogether, wherever possible. It is important that these spending cuts and efficiency measures do not exist in isolation but are joined by further bold policies addressing issues such as red tape reform and late payment.”

Read related items on:
Comprehensive Spending Review
Central government
Forum of Private Business

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