Budget Brings Few Surprises For Small Retailers

“Alistair Darling’s first Budget is unlikely to make the situation much better, but it is a relief that it will not make it any worse either,” says John Wright of the Federation of Small Businesses (FSB).

“The deferral of plans to change income shifting rules, which would have forced tens of thousands of family businesses to create and maintain a massive amount of extra paperwork on individuals’ contributions to their business, is welcome news,” he continues. “Plans to reform regulation, improve access to finance by expanding the small firms loan guarantee scheme, help female entrepreneurs and for a goal to give at least 30% of public sector procurement to small and medium-sized businesses all have our support. These intentions will need to be backed up with real action.”

However, The British Retail Consortium is rattled by the chancellor’s emphasis on the impact of carrier bags on climate change. “It’s outrageous to suggest carrier bags are a major cause of climate change,” says BRC director general, Stephen Robertson. “There are many more significant contributors. Retailers have already committed to reduce the environmental impact of plastic bags by a quarter by the end of this year. Huge progress has been made without any need for legislation. Customers took a billion fewer bags in the last 12 months and retailers are over half way to achieving the target on cutting the use of new plastic. This shows bans or taxes are not the only way.”

The FPB is also disappointed with Darling’s speech. “This Budget is more about what has not been done to help smaller businesses, rather than an announcement of any genuinely proactive and positive measures,” said Forum of Private Business (FPB) chief executive, Phil Orford. “While there are some welcome initiatives, they do little, if anything, to offset the tax burden due to be implemented in April. The Chancellor has missed a golden opportunity to convince the small business community that he is on their side.” One expected tax increase was small firms’ contributions in the form of corporation tax. This is set to rise to 22% by April 2009, but the higher rate paid by bigger businesses will be cut from 30% to 28% from April 2008.