22/10/2008

Mandelson Pledges Support For SMEs

The government will push billions of pounds into the small business sector by radically reducing the lag time in paying its bills, Peter Mandelson has announced.

This is one of a number of measures to be introduced by the new Business Secretary to help bolster small and medium-sized enterprises in the UK.

Lord Mandelson pledged the government was 'on the side' of smaller businesses, and has laid out plans for around £350m of aid for the sector.

Meeting the House of Commons Business Select Committee for the first time since joining the Cabinet, Lord Mandelson said: "We want to help smaller businesses to plan for the difficult times ahead.

"We are on the side of small and medium-sized businesses and understand that they are facing tough times," he said.

The news comes as the CBI warned of manufacturers' confidence being at a 28 year low.

Earlier this week, the Ernst & Young Item Club think-tank said the economy had "deteriorated dramatically" in the last three months, and hinted the UK was already in recession.

Lord Mandelson said it was important to ensure overseas markets remained open for UK business, saying: "We have a very strong productive base in the UK."

Under the £350m package for small business, the government has said it will reform the way it pays bill.

All bills will now be paid within ten days instead of 30 days.

Skills Secretary John Denham said: "We've got to make sure that small businesses have cash flow."

"So government is bringing forward the payments - to 10 days and that pushes billions of pounds out into small businesses, " he added.

Tory plans include a cut in payroll taxes, by one penny, for firms with fewer than five employees – which they claimed could save the average small business £600.

The Conservatives have also suggested a deferment on VAT payment for six months for SMEs.

According to new research, firms that put emphasis on staff development are typically better equipped to weather a recession.

Minister Denham said: "We want to make sure that small businesses can get short courses for their employees.

"We think that will help hundreds of thousands of people to get skills which are proved to pay back to the companies they work for," he said.

Training packages will be available to most firms employing less than 250 people.

(PR/JM)

Related UK National News Stories
Click here for the latest headlines.

23 February 2011
Welcome For EU Review Of Support For Small Businesses
The UK Government, alongside other European member states including Belgium and Italy, today welcomed publication of the European Commission’s Small Business Act Review.
20 October 2011
Bank Support For Small Firms 'Not Enough'
Research shows bank initiatives to boost small business lending have not gone far enough, says the Forum of Private Business Just over a year after the launch of the British Bankers' Association's Business Finance Taskforce, new research suggests that it has not yet achieved its aim of repairing the relationship between banks and small businesses.
23 June 2010
SMEs Back Budget Pledges
Small business support group the Forum of Private Business has welcomed a number of key victories for small to medium enterprises (SMEs) in Tuesday's Budget.
21 May 2010
Coalition 'Will Aid UK's Private Businesses'
There has been a positive reaction to the publication of the full coalition agreement between the Conservative and Liberal Democrat parties. The Forum of Private Business has said that their initial impression is that thousands of smaller businesses could benefit from many of the measures outlined in the document.
17 January 2011
Simple Tax Laws 'Would Pay Off'
Some small business owners are so frustrated with the complexity of the UK tax system that they would pay more just to see it simplified, new research has found.