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Proposals for SMEs not effective, says BCC

Nov 26 2008

David Kern, chief economist at the British Chambers of Commerce

David Kern, chief economist at the British Chambers of Commerce, has criticised Alistair Darling’s Pre-Budget proposals for SMEs.

Speaking to SmallBusiness.co.uk, he said: ‘A cut in corporation tax, National Insurance and other taxes paid by small business would have been more effective ways of stimulating the economy, as it would have put money directly into people’s pockets.

‘The main measure – a reduction in VAT – is not the most effective way of achieving this, as there is no guarantee that people will spend more. Especially as we are in a situation where prices are being cut anyway.'

For Kern, the levels of borrowing taken on by the government is a major risk and will be a burden on the future taxpayer. He does, however, acknowledge that it is a chance the 'government had to take'.

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