The UK economy is "on track" for recovery despite "challenging" global conditions, according to the chancellor.
In his speech today, George Osborne said the British economy is heading towards "sustainable growth", as increased export trade was helping to reduce the danger of a double-dip recession.
The Autumn Statement came in response to the Office for Budget Responsibility's upgrading of its 2010 growth forecast. Osborne told MPs the UK was "moving from an economy based on debt to an economy where we invest and export".
However, the Federation of Small Businesses (FSB) has called on the government to implement policies that will help deliver a stronger economy through small business growth. The FSB wrote to the chancellor ahead of the Autumn Statement to highlight clear and comprehensive strategies which will allow the small business community to employ and invest.
National chairman of the FSB, John walker, said: “Over 80% of the jobs created in the EU between 2002 and 2007 were in small and medium sized businesses, showing the potential for growth in this sector. Yet recent figures from the FSB ‘Voice of Small Business’ Index showed that one in 10 firms expect to decrease employment in the final quarter of 2010, as business confidence remains muted.
“Small businesses can deliver the growth to achieve a private sector led recovery, but the government will need to play its part in triggering and nurturing this process.”
By the end of this Parliament, the FSB is calling for the government to permanently reduce VAT to 5% in the construction sector for maintenance and home improvement works, which it is estimated will boost Treasury coffers by £1.4bn.
Moreover, the FSB is urging the government to create more competition in the banking sector and to provide alternative sources of finance for small businesses, as well as simplifying the process of accessing state funded venture capital finance.
According to the FSB, it is the UK’s 4.8 million small firms that are key to a private sector led recovery, as they will boost tax revenues and employ the unemployed.
© Crimson Business Ltd. 2010