Government Spending Cuts – Will Small Businesses Prosper or Flounder?

The new UK coalition Government has, as expected, announced huge public spending cuts aimed at reducing the country’s massive debt. Did you know that the UK has one of the biggest budget deficits in Europe? The cuts will total £6.24bn in this financial year alone and we thought it would be interesting to gauge the differing opinions about the impact they might have on small businesses.

Some organisations foresee strong private-sector-led recovery

Organisations such as the Confederation of British Industry (CBI), the British Chambers of Commerce (BCC), the Federation of Small Businesses (FSB) and the British Retail Consortium (BRC) have cautiously welcomed the Government’s actions. They believe that reducing the budget deficit will help to rebuild confidence in the economy and kick-start recovery.

Richard Lambert, director general of the CBI said, “"We have been calling for a strong focus on deficit reduction to underpin the UK's fiscal credibility and position us for a strong private-sector-led recovery”.

What about help for small businesses?

To give economic recovery a boost, the Government has committed to:More...