SMEs urge the Chancellor to deliver business-focused Budget 2014

IN: Business news

While growth prospects may have vastly improved since the 2013 Budget, business bodies warn continued support is needed for UK SMEs in order to strengthen and stabilise the current recovery.

Perhaps top of the agenda for Britain's small business community in the run-up to this year's Budget is the need to reform the current business rates system.

Based on the size of a commercial property, the system fails to take account of the rise of online retail, placing additional pressure on the already-squeezed British High Street, which saw footfall decline 2.9 per cent in the twelve months to February.

The British Retail Consortium has called for Chancellor of the Exchequer George Osborne to launch a complete overhaul of this system, in addition to the £1 billion of rate relief announced in the Autumn Statement. Also of high priority for UK SMEs is the lingering issue of access to finance.

With four in ten small firms still being refused loans and overdrafts, improving competition within the financial sector is of paramount importance. Speaking on this issue, the CBI's director general John Cridland confirmed: "We need to nurture the UK's vibrant alternative finance market and encourage even more competition in banking so that businesses can get growth capital."

Aldermore's group commercial director Mark Stephens has also supported this view, stating: "An uncompetitive banking sector that not only restricts new entrants but prevents SMEs and sole traders from expanding is not healthy for the UK economy. It would be helpful if there was greater communication from the Government and regulators to ensure that SMEs understand that there are alternatives in the banking sector."

Alongside a more diverse banking sector, UK SMEs also hope to see the Budget 2014 address the issue of late payments, which cost the UK's smallest businesses an estimated £2.5 billion each year. While invoice finance services can go some way to helping SMEs manage cash-flow in the face of this persistent problem, government has been urged to tackle the issue head-on through measures to encourage shorter repayment periods.

Similarly, with many small companies facing soaring energy costs, the Federation of Small Businesses has proposed that government should introduce legislation to give small businesses the same level of protection as domestic consumers when dealing with energy firms.

Finally, with a significant proportion of SMEs struggling to recruit employees with an adequate skill level, including 30 per cent of manufacturing industry businesses, government will be under increasing pressure to introduce measures to combat the skills gap in this week's Budget.

Aldermore invites UK SMEs to join the Bank on Twitter alongside the Budget speech tomorrow, sharing thoughts on how the Chancellor's announcements impact on small businesses using the hashtag #BudgetPanel.

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