The FSB has called on politicians to stop playing politics when it comes to the economic recovery and formulate a realistic plan to help small businesses grow.
Ed Balls, the Shadow Chancellor, has been vocal in his call for the 20p VAT rate to be reversed but the FSB thinks this would not be a sensible move and could actually harm the UK’s fragile economy.
The Federation thinks that rather than reversing the rate, the UK should do as some other EU countries have done and implement a temporary cut in VAT to 5% in the tourism and construction sectors for a period of 12 months.
Such a move would kick start growth, lead to the creation of more jobs and increase the amount of money the Treasury receives. The FSB believes this is a much better option than rushing through infrastructure projects costing £5 billion. The FSB also says Labour must develop more policies to bolster growth than just cutting VAT and that real talks must commence into ways of rebuilding and strengthening the economy.
John Walker, the FSB’s national chairman, said that unless we see a more aggressive, proactive approach to growth the economy is going to decline. The Federation agrees that action must be taken, but reversing the VAT increase is not the answer.
The UK has a very fragile economy at the moment and the political parties shouldn’t be kicking it around like a football at their party conferences. Instead, the parties should stop sparring and work together to deliver tangible growth policies.
Although business owners in the UK have little confidence in the national and world-wide economies, they are still confident about the prospects for their own company over the next six months. Only 25% of business owners think the coalition is doing enough to encourage growth and stimulate the economic recovery.
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