Decisive support for local businesses facing a global challenge
December 1st, 2008 | by Site Admin |Temporary reduction in standard rate of VAT will help overall business margins
Labour’s fiscal stimulus package includes action of direct help to small and medium businesses in Glasgow North.
Commenting, the Chancellor of the Exchequer, Alistair Darling MP said:
“The Government has set out a programme that takes immediate action to meet short term priorities to support individuals, business and the economy with a balanced fiscal programme that sets out a stable and sustainable future for Scotland.” >>More
As part of a fiscal stimulus package, there will be a temporary reduction in the standard rate of VAT to 15% from 1 December 2008 until 31 December 2009 to provide further support for growth and incomes during the economic downturn.
This is the equivalent, for the average household, of £275 a year for extra spending. The Government is also bringing forward £3bn of capital spending from 2010-11 to 2008-09 and 2009-10.
Bringing forward valuable public investment will impact directly on economic activity, in particular supporting the construction sector, which is expected to be disproportionately affected by the economic downturn. This will be of benefit to businesses and consumers in Scotland.
Jim Murphy, Labour’s Secrectry of State for Scotland said the Labour Government “is taking decisive action to protect businesses, both small and large, jobs, homes and our future stability and prosperity.” >>More
Supporting small businesses
PBR announces a package of measures targeted at supporting small businesses access the capital and manage the cash flow they require to endure the challenging economic climate. Elements of the package include:
- more generous tax relief for businesses now experiencing losses, by allowing temporary additional carry-back of up to £50,000 of losses to be set against taxable profits from the last three years;
- a new HMRC Business Payment Support Service to allow businesses in temporary financial difficulty to spread payment of their HMRC tax bills over a timetable they can afford, with no additional surcharges or penalties; and
- a new Small Business Finance Scheme to support up to £1 billion of bank lending; a separate £1 billion guarantee facility to support bank lending to small exporters; a £50 million fund to convert businesses’ debt into equity; and a £25 million regional loan transition fund.
Labour’s leader in the Scottish Parliament, Iain Gray MSP demanded parallel action from the SNP to match the work of Labour:
“We have been calling on the SNP to act but they have failed to do this during the recent crisis. They cannot bring capital investment forward because they are hidebound by their unworkable Scottish Futures Trust. They should drop it now and get on with the investment which will deliver schools and hospitals and protect much-needed construction jobs.
“The Labour government has provided a £20bn fiscal boost, cut VAT, increased personal allowances on income tax for the lowest paid and agreed a three month moratorium on repossessions and funding for free debt advice. Meanwhile the SNP have stubbornly refused our demands to act on protection for Scots facing repossession of their homes.” >>More
These measures will be available to all UK-based business, and may be of particular benefit to the 292,330 Small and Medium enterprises in Glasgow and Scotland.
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