"We'll back cuts, now ministers must back businesses" - Chamber

Friday 24 July 2015

Ministers’ plans to fill the £145 million deficit have won the support of businesses – but they are calling for a tax credit system to support investment and start-ups.

The Chamber of Commerce is backing the package of £90 million worth of cuts, and a series of charges for health and waste, but they say that there is still more to do.

And they have warned that ministers need to take the opportunity to tackle the issue of public sector workers’ pension debts – which they say is the next black hole waiting to happen.

But despite the notes of caution, Chamber President Kristina Le Feuvre described ministers’ Medium Term Financial Plan as welcome, constructive and timely.

She added that some kind of tax credit system would enable investors and businesses to grow the economy, despite the difficult economic environment.

Mrs Le Feuvre said: “Business groups have long been advocates of some form of tax credit to encourage business investors.

“Schemes such as this represent a potentially strong and effective solution for government since they encourage investment risk being borne by the private sector but the rewards generated through increased employment, tax payments, social security contributions, etc, are tangible and provide a direct stimulus to the economy and to government’s coffers.

“Targeted tax incentives serve to decrease the cost of capital for small businesses and start-up enterprises, ensure that the risk factor is lowered, whilst the ability to take advantage of tax credits for start-ups who may not be in a profit situation immediately could be deferred to ensure that benefits can be derived at a later stage in the development of a new enterprise.”