Small businesses need all the help they can get to survive and their objective is to be around when the green shoots appear.
Many will fail. BDO STOY HAYWARD forecasts that 40,000 will go to the wall in 2009. If that doesn’t set alarm bells ringing in the Chancellors ears, nothing will.
Cash is king and without a healthy cash flow, businesses die. It’s that simple. Yet we see Lord Mandelson kicking small businesses when they’re down by refusing to cut the increase in business rates.
In fact, it gets worse because he is retaining a 5% rate increase at a time when inflation is less than half that level. And that will mean that vital cash flow will slow down for many businesses.
So much for the government’s fine words about helping the sector, when in truth they are making it more difficult for small businesses. Doesn’t he know that for many of them the name of the game is survival?
Most small and medium sized businesses simply want to be here this time next year and the FSB is calling for a freeze on business rates this year to help them. I agree, but of the Chancellor doesn’t want to go the whole hog, the least he could do is cut the increase to the prevailing rate of inflation.
That would be a common sense approach. But I fear that common sense is a quality sadly lacking in this government.