Sponsored by
Businesses still face challenging times

Published on Saturday 27 February 2010 12:05

PETERBOROUGH business leaders say the revised improvement in GDP figures from 0.1 per cent to 0.3 per cent should not divert attention from the real challenges facing UK plc.

PETERBOROUGH business leaders say the revised improvement in GDP figures from 0.1 per cent to 0.3 per cent should not divert attention from the real challenges facing UK plc.Despite the growing optimism from certain quarters, the recovery remains fragile and there are clearly a number of risks that lie ahead.

There are two key factors, according to John Bridge, chief executive, Peterborough Chamber of Commerce, that need to be addressed, namely the uncertainty relating to public finances and the necessity to deal with the very high level of debt, and the continuing issues of access to finance for businesses.

He said: "We have also seen alarming declines in business investment both quarterly and annually. This heightens the long-term threats to the economy.

"Businesses with very weak demand for their goods and services have cut down on investment, to take stock in order to survive."

Mr Bridge said that all organisations are desperately looking for Government to be supportive and not to impose additional costs.

"We would urge them not to go ahead with the planned increase in National Insurance contributions," he said.

Colin Parnell, Peterborough branch chairman of the Federation of Small Businesses (FSB), agreed by saying that "the FSB urges the Government to re-think its plans to increase employer National Insurance contributions as this tax on jobs will discourage small businesses from taking on additional staff, therefore hindering further economic recovery.

"Small businesses will be key players in job creation and it is important that firms have access to affordable finance and credit to enable them to invest and create jobs."

So strong has been the sentiment that the UK's leading business groups, including the Chamber of Commerce and FSB, have formed a unique coalition promoting an internet petition that calls for the one per cent employer National Insurance Contributions increase - planned for April 2011 - to be scrapped. For details, visit website www.no-nics-rise.co.uk

It's an issue that has touched a nerve with local companies, such as independent retirement income broker Rockingham Retirement.

Director of corporate communications Laura Goodman said: "I find it soul destroying that, once again, we as businesses find ourselves having to campaign to keep ourselves operating as viable, profit making businesses offering job opportunities to our local communities.

"We are a rapidly growing company that will be recruiting heavily over the next 12 months. Due to the nature of our business, we hope to be able to recruit from some of the people who have found themselves made redundant from companies that operate in the financial arena in our locality. It doesn't take a rocket scientist to work out the implications if this recruitment drive failed to happen because of a hike in NICs."

Paul Smith, managing director of local engineering firm Global Rebar Services Ltd, has found a total lack of help from the Government so far.

He said: "The EFG scheme was supposed to provide small businesses with affordable finance, but it is totally inaccesible. HMRC have little or no sympathy.

"The increase in employer NI contributions is a kick in the teeth, just when we should be looking forward to recovery. The government need to kick-start lending to small business by putting pressure on the banks to lend.

"Unless businesses can get access to the finance that they need, then the recovery will be slow as every penny needs to be accounted for."

PETERBOROUGH business leaders say the revised improvement in GDP figures from 0.1 per cent to 0.3 per cent should not divert attention from the real challenges facing UK plc.

Despite the growing optimism from certain quarters, the recovery remains fragile and there are clearly a number of risks that lie ahead.