The government has outlined a new set of measures aimed at improving the UK economy, including a £40bn plan for credit-easing that would allow small businesses to borrow cash.
In his autumn statement Chancellor George Osborne also said anyone investing up to £100,000 in a start-up business from April 2012 would be eligible for income tax relief of 50%.
And he confirmed the setting up of a £1bn business finance partnership to help secure funding for medium-sized firms and extended the business rates holiday until April 2013. The scrapping of an expected fuel duty escalator has also been welcomed by small businesses.
The moves were cautiously welcomed by David Jenkins, commercial director of south Wales firm Jenkins Bakery. On the day of the release of the autumn statement, the bakery was featured on BBC television discussing the downturn on the high street. Jenkins said: "We have a good relationship with our banks and are well-funded so credit easing is not an issue that would impact us. There were some positives, but we would have liked to have heard more being said about the state of the high street."
This was echoed by Mike Holling, head of retail operations at Bird’s of Derby and chairman of the National Association of Master Bakers. He said: "There is no doubt about it, these are challenging times. The duty relief is to be welcomed, although that is only being put off for the time being and the freezing of business rates will be welcomed by smaller businesses."
Osborne said the UK economy was now forecast to grow by 0.9% this year, compared with 1.7% forecast in March and 0.7% next year