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Budget preview: Osborne told to help with firms’ funding
THE Chancellor must use tomorrow’s Budget to make it easier for firms to find funding, according to the Federation of Small Businesses (FSB).
The FSB’s Voice of Small Business Index from the first quarter of 2013, showed confidence was increasing, but fewer businesses planned to grow, citing the domestic economy and access to finance as barriers to growth.
John Walker, North Yorkshire chairman of the FSB, said he expected growth in gross domestic product (GDP) would be higher than the –0.3 per cent recorded in the final quarter of 2012, although inflationary pressures would persist, with rising energy bills and fuel costs affecting disposable incomes.
He said: “A clear plan for the Business Bank must be put in place to increase and help ease access to finance and to boost competition in the sector, both through encouraging non-bank lenders such as peer-to-peer lenders to join the market and through new ‘challenger’ banks entering the arena.
“Regulation has a key part to play. Measures must also be put in place to ensure that smaller banks can access the funding available on an equal footing so they can pass on the benefits to their small firms customers.”
Miss McIntosh said: “Thirsk, Malton and Filey face the highest fuel pump prices for the region, and indeed other parts of the country, making for costly car journeys for local people as well as pushing up the cost of delivering public services, such as ambulances, police cars and school buses as well as waste collection and disposal.”
She said she believed Thirsk, Malton and Filey met criteria relating to the price of fuel and distance from the pump that motorists had to travel to qualify for the approval of the European Commission and EU State Aid rules.
“I hope the Chancellor will use this week’s budget to ease the economic impact locally of high fuel prices at the pumps in rural parts of North Yorkshire,” she said.
Views on what the Chancellor should do
‘Stop the cash squeeze on charities’
Caleb Ellwood, manager of York Foodbank, said Government cuts were putting pressure on charities, which were also receiving less funding.
He said 43 per cent of the food bank’s users had been unable to afford food because of benefits-related issues. But the cuts had not yet fully kicked in, with the current high demand driven by delays in benefits and long waits for disability assessments as Government departments were squeezed.
He said: “We’re anticipating that demand will go up significantly. Every agency is anticipating we will come across more people tipped into crisis by benefit delays, by cuts and additional council tax for people on benefits.
“People need a lot more support to get back on their feet and back into work and that’s not happening through the Government.
“The Big Society is great in theory, but unfortunately there has not been the additional funding to increase the capacity of the voluntary sector.”‘
Give businesses confidence to spend’
Rachel Goddard, managing director of PR and marketing agency Intandem Communications and chairman of York Professionals, said the Chancellor should address the lack of confidence which is stopping businesses from spending.
She said: “A lack of confidence in the economy is acting as a barrier to growth regionally and nationally.
“The large and small businesses I work with are either nervous of investing the money they have or don’t have access to the finance they need in order to grow. The economy desperately needs an injection of both cash and confidence, and I welcome the news about Chancellor George Osborne’s proposals for a separate pot to stimulate growth outside London. This is all about reviving our flagging manufacturing industries and moving towards an export, not an import model.
“It’s about investing wisely in research and development for new science, creative and digital technologies – an area of particular strength in York – and turning brilliant ideas into reality so we can be serious players in the world economy.”
'VAT cut could fuel economic growth’
Matthew Lamb, managing director of Potter Logistics, said the Government was right to accelerate infrastructure projects, but the economy also needed a short-term boost.
He suggested a reduction in VAT to 17.5 per cent would bring it back in line with other countries even if it targeted priority sectors, such as construction.
Mr Lamb said: “I don’t think Mr Osborne has got an awful lot of room for manoeuvre, but there is always some room for manoeuvre.” He said that with the average family spending £3,000 less a year, a reduction in VAT, which taxed everything the consumer spent disposable income on, could boost spending. A VAT cut would also bring down the price of fuel.
He said: “There is evidence to show that the higher the cost of fuel, the less we actually use and this causes a reduction in tax receipts. Yes, this has to be balanced against environmental issues, but fuel efficiency is much higher compared to five years ago and you can’t expect public transport to pick up the slack. Trains are busier than they’ve ever been.
“The cost of fuel goes straight into the inflation basket causing the higher cost of food and service.”
Fears beer tax rise will hit landlords
John Lewis, founder of Treboom microbrewery based at Shipton-by-Beningbrough near York, said the growth in the number of microbreweries demonstrated the impact that punitive taxes had on the beer industry.
He said he was concerned about the forecast increases in beer duty, because it is always an issue of concern for his customers, the landlords. “It doesn’t just affect me in that I have to pass those costs on, but when I start talking to landlords they worry about having to put their costs up.”
He said that microbreweries were at the quality end of the market, and people would pay more for the quality, but buy less. “We pay 50 per cent less duty than bigger producers, that’s one of the reasons there’s been such a massive explosion of microbreweries. It just shows the impact if you can reduce that margin of duty
“Minimum pricing goes some way to addressing the balance between on-trade and off-trade sales. It might help towards addressing the balance although it penalises people who want to have a drink at home.”