The UK’s new business secretary, Peter Mandelson has pledged to help small and medium sized firms beat the downturn.
"We want to help smaller businesses to plan for the difficult times ahead," he told the House of Commons business select committee.
Mandelson’s show of support comes after the unveiling of a £350m package by skills Secretary John Denham to help small companies put their staff through short courses aimed at increasing productivity.
Mr Denham also announced that training systems were being overhauled to cut bureaucracy and delays.
However, David Frost, director general of the British Chambers of Commerce (BCC), remained sceptical of the government’s good intentions:
“The economic slowdown is emphasising the UK's current skills shortages, so making more funds available to improve staff skills will benefit small firms. Of course, the available short courses must be relevant to actual business needs and not just pay lip-service to them.
“We are pleased to hear that John Denham intends to reduce bureaucracy associated with training schemes. But, we’d like to know how and when this will happen, as the government has promised to reduce bureaucracy on numerous occasions in the past with few discernable results.”
Small business has become the latest battleground between the two main political parties amid renewed hostilities after an initial agreement over the banking bail-out. Conservative proposals include a six-month 1p cut in National Insurance contributions for employers with fewer than five staff and a VAT holiday.
But Mr Denham contrasted the “practical” help being offered by the government with Tory proposals funded by cutting other business tax relief.
As part of its £350m package to help small firms, the government has pledged to pay its own bills within 10 days instead of 30 days, to help reduce cashflow burdens on small businesses.
More help may also be on its way. Chief executives of leading banks will tomorrow attend a summit with the government in the latest move to help small firms cope with the economic downturn.
Mr Mandelson said the meeting aimed to impress on bankers the importance of continuing to lend to smaller firms at “competitive” rates similar to those offered last year.
© Crimson Business Ltd. 2008