FSB: Growth plan needed to boost SMEs
Sep 26 2011
The FSB is calling for a 'credible plan for growth'
Politicians need to produce a credible plan for growth to support the UK's small companies, the Federation of Small Businesses (FSB) will tell the Labour Party conference.
Labour, through Shadow Chancellor Ed Balls, has been actively calling for a reversal in the 20 per cent VAT rate. However, the FSB believes that this is ‘wildly unrealistic’ and could cause more harm than good to the already fragile recovery.
Instead, the FSB believes the UK should follow the lead of other EU countries and introduce a limited and temporary VAT cut in the construction and tourism sectors for one year.
Cutting VAT to 5 per cent in these strategically important sectors could kick start growth, lead to job creation and increase revenue to the Treasury, as well as widen the tax base, says the organisation.
The lobbying group is also calling for Labour to have more policies for growth up its sleeve than just the VAT cut and for the political posturing over the size and speed of the cuts to make way for real talks on how to rebuild and strengthen the recovery.
FSB national chairman John Walker says, ‘The FSB is concerned that without a more aggressive and proactive approach to promoting growth that the economy will stagnate and decline. While we agree with Labour that something needs to be done, we believe that a full reversal of the VAT rise is not the answer.
‘The economy is too fragile to be kicked around like a political football during party conference season. We need to see all the parties working together and putting economic recovery first. The political sparring between parties about the cuts is not the answer and so tangible policies which deliver growth must be put in place to boost growth, jobs and UK plc.’
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