Help for SMEs announced

With the recession biting, Alistair Darling is being pressed to do more to help businesses large and small.

More help for small and medium-sized firms is expected, with pledges to reduce administrative burdens a Budget favourite for many chancellors in the past.

But there is likely to be action to tackle the use of tax havens - a bid to bring more revenue into a Treasury whose books are drowning in red ink.

There have also been calls to freeze business rates and drop the rise in national insurance contributions.

Stakeholder Response: British Retail Consortium

Jane Milne, BRC business director, said: "Offering extra time to pay part of this year's five per cent annual business rates increase is welcome help.

"The usual formula means the chancellor's prediction that RPI inflation will be minus three per cent in September should reduce next April's annual increase and so make it easier for businesses to decide whether to spread their payments. But retailers still face large increases next April thanks to business rates revaluation and Business Rates Supplements and the chancellor has done nothing to reduce the tax bills from empty property.

"The need to have lots of shops means retail businesses and jobs are more at risk from property cost increases than other sectors. The chancellor should have announced an immediate freeze on all new business rate burdens."

Stakeholder Response: British Council of Shopping Centres

Jeremy Collins, BCSC president, commented: "As anticipated, the government has offered to assist with trade credit insurance schemes, as well as further help for loss-making businesses.

"While we are disappointed there was no announcement on further rate relief for empty property, we will continue working with government and other industry bodies to pursue ways of moderating the effects of these costs on the retail property industry.

"We will also continue to work with the public and private sectors to look at measures that can help get empty units back into use."

"A relaxation of the regulations on REITS would have given a boost to encourage capital investment in retail property development, which has been severely impacted by current economic conditions.

"Without this capital, town and city centres which are desperately in need of the regeneration and employment opportunities that new shopping environments can deliver, will continue to suffer from the impacts of the recession."

Stakeholder Response: National Federation of Builders

Julia Evans, chief executive of the National Federation of Builders, commented: "This Budget was branded 'Building Britain's Future' but unfortunately there was barely a mention for the people that will actually build that future – the UK construction industry. Help for our industry was very thin on the ground and the small assistance handed out to house building will not be enough to kick-start the sector. It would be churlish not to acknowledge the nod towards continued capital investment but overall this was not the Budget we needed.

"Where is the help for SMEs - the engine of both the construction industry and the wider economy?

"We are particularly disappointed that yet again the government has missed the opportunity to reduce VAT to 5 per cent on domestic repair, maintenance and improvement work.

"This was the ideal time to make the change – a reduction in VAT would have stimulated work in the sector, creating jobs, bringing a larger proportion of this work into the formal tax-paying economy with accompanying benefits for the treasury through increased revenue from payment of income tax, corporation tax and national insurance contributions. There would even have been benefits for the customer, no longer attracted to cheap deals and shoddy work from rogue builders. It was win-win-win all round. The government was faced with an open goal and has put the ball in the stands. Very disappointing."

"The 'top-up' for the trade credit insurance scheme will be a comfort for businesses and their supply chains."

Stakeholder Response: Finance & Leasing Association

Stephen Sklaroff, director general of the Finance & Leasing Association, said: "Any increase in capital allowances is welcome. But today's announcement will only help one in twenty UK businesses. Many smaller firms need to lease equipment to run their businesses and today's tax breaks are not available for leased equipment. The government also needs to help leasing companies by sharing risk and improving the flow of funds."

Stakeholder Response: National Federation of Retail Newsagents

The 2009 budget will provide small change for independent newsagents who are in dire need of easier access to credit, a more supportive attitude from suppliers by avoiding the tightening of terms, a rethink on VAT and a delay in the planned increase in employers National Insurance contributions.

Hikes in alcohol, tobacco and fuel duty will all have their knock on effect on sales and the cost of doing business. The huge rise in landfill taxes will no doubt provide newspaper and magazine wholesalers with further excuses to raise Carriage Service Charges for newsagents.

The several planned changes to Business Rates, due to come into effect over the next two years, will have a particularly damaging effect on independent retailers during this current period of economic uncertainty. The option of postponing part of this April’s five percent annual increase is welcome but not enough as it simply moves the cost from the profit and loss account to the balance sheet.

The NFRN welcomes the work in hand that will better link people losing jobs in retail to retailers recruiting. But the budget has done little to help under pressure retailers keep people in work. This year's revised timetable for deciding the National Minimum Wage meant it was not mentioned in The Budget. The government and Low Pay Commission must keep any increase below 1 per cent to allow retailers to both maintain and increase job opportunities.

The NFRN predicts consumer confidence to remain frail in the light of the Chancellors announcements.

Stakeholder Response: South East England Development Agency

SEEDA chairman Jim Brathwaite said: "This package is good news for businesses in the South East. The measures will help with both short-term cash flow and the long term investment that is needed to drive the upturn. Coupled with existing government programmes and SEEDA's targeted support for businesses in the region, there is now more help for businesses across the South East to weather these turbulent economic times, and emerge stronger as the growth engine of the UK economy."