A small firms’ lobby group has dismissed claims made by a former senior cabinet minister that a decade of Labour government has created economic stability for small businesses.
The Forum of Private Business (FPB) has questioned the claims made by former home secretary Charles Clarke at Wednesday’s Small Firms’ Summit in London.
Clarke said that, in spite of the current turmoil in the credit markets and the recent run on Northern Rock, a ‘relatively stable financial situation’ had been achieved in the UK over the past 10 years.
However, the FPB countered that moves such as the increase in the small firms rate of corporation tax in this year’s budget, while the headline rate was reduced, have led to increased uncertainty for smaller firms.
Further measures such as the announcement of plans to abolish capital gains tax taper relief in favour of a flat rate of 18% will also see many large firms benefiting while small firms lose out, the FPB argued.
Such moves have led to the ‘further destabilising of an already uneven playing field’, the FPB added, which is also characterised by the absence of any small business representatives on the PM's newly formed business council.
However, Clarke acknowledged that the decision to scrap taper relief had not been well received by the small business community, and that he believed Alistair Darling would consider the case against the changes.
Encouragingly, he also called on the banks to be more prepared to take risks in backing smaller businesses’ ideas, as well as urging education providers and employers to forge stronger links to produce a better-trained workforce.
“There are opportunities to try and build a better relationship, but it's a problematic issue,” he said.
“There is still a very long way to go before we can say we have achieved the kind of relationship we would like to see.”
© Crimson Business Ltd. 2007
