Credit access could stop insolvency?

Published on 24 May 2010 under category: legal

The UK's small businesses have called on the government to ensure that public spending cuts do not impede their access to credit.

Chancellor George Osborne announced public spending cuts worth up to £6.5 billion today (May 24th).

The Department for Business will have its budget reduced by £802 million, which could affect small businesses who have been reliant on schemes such as the HM Revenue & Customs' Time-to-Pay.

Ahead of today's announcement, the Federation of Small Businesses (FSB) urged the government to make sure taxes are not increased to cover the rise in personal allowances.

Sara Lee, spokesperson for the FSB, said: "Access to financial credit would be of the greatest benefit. Small to medium sized businesses are looking at cash flow and taking more staff on. In the recovery phase, they will need to borrow to do that."

She added that she wanted the coalition to implement the former Labour government's proposals for a Small Business Credit Adjudicator.

The adjudicator was devised by Labour as a means of ensuring that banks could no longer unfairly turn down small businesses for credit.

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