In his last Budget before the general election, Chancellor Alistair Darling has announced measures to force banks to lend to businesses.
In his last Budget before the general election, Chancellor Alistair Darling has announced measures to force banks to lend to businesses.
Darling said in his speech to the House of Commons, ‘There are still companies who are being unfairly denied credit. To help them we will set up a new service to fast track complaints, which will enforce judgements if credit is found to have been unfairly denied.’
In addition to the launch of this new Credit Adjudication Service, Darling also announced that RBS and Lloyds will be forced to lend £94 billion to businesses over the next year, nearly half of which will go to SMEs.
Mark Bachelor, managing director of business consultancy Markman OTW, says: ‘On the face of it there are a lot of encouraging things for small businesses here. The most obvious measure is the issue of bank funding. It’s good to see that bank lending will increase to small businesses and that there will be a new Credit Adjudication Service.’
The Chancellor also announced a reduction in business rates and a doubling in annual investment relief. Entrepreneurs’ relief of 10 per cent (as opposed to 18 per cent) for those who sell their businesses will also be doubled to £2 million.
However, Simon Dolan, owner of firms SJD Accountancy and Easy Accountancy, says the budget lacked substance: ‘This is a typical Labour budget, with lots of schemes of little value. The reduction of business rates will be a useful for businesses, but there’s not much detail about it at the moment.’
‘Small businesses would have benefited from seeing a holiday in employer’s national insurance. So it’s disappointing to see that he has decided to go ahead with [the national insurance increases].’
