FSB response to Queen's Speech 2009

Wednesday, 18 November 2009 12:00 AM

Commitments in the Queen's Speech to address issues in the banking sector, internet provision and the energy markets must be followed through rather than being used for political gain, the Federation of Small Businesses (FSB) has warned.

The banking sector reform proposals have the potential to help the quarter of small businesses still struggling to access affordable finance and we welcome support for those grappling with broadband access and looking to play their part in moving towards a low carbon economy - however, small firms must feel the benefit of these proposals rather than becoming victims of pre-election rivalry.

Banking

Any changes in the governance of the finance sector must not be pure political rhetoric, but must translate into improvements in access to finance for small firms. Access to finance needs to be improved through more competition for small business banking on the high street and improving the availability of mortgages for the self-employed. The role of Regional Development Agencies and their devolved equivalents should be expanded to provide more flexible finance locally, while the Post Office Network should be turned into a Post Bank offering support for small firms by utilising the Post Office Network. The FSB has also called for the Chancellor to be creative when selling off parts of the nationalised banks of Lloyds Banking Group, RBS and Northern Rock by ensuring they can only be purchased by new entrants to the market and provide a greater focus on small business banking.

Online

More than half of small businesses rely on the internet for up to 50 per cent of their annual turnover, so the online world is crucial to small business development. The Government must show its support for firms, particularly in rural Britain where businesses have been waiting for years for promised Government action to deal with the 'notspots' - where there is no broadband access.

However, we believe that a broadband tax to subsidise the target of a minimum 2mbps of broadband will only deter the private sector from improving its own infrastructure. Small businesses shouldn't have to pay for a service which could be encouraged by opening up the market to more competition from internet providers who should then be compelled to install more efficient and effective speeds to attract the consumer.

Environment

With the Government committed to a low carbon economy, it is important that any legislation in this area does not hinder small firms through a one-size fits all approach. FSB research shows that the majority of small businesses are keen to play their part. The majority are already actively engaged in recycling and monitoring their energy consumption and over a third use environmentally friendly products. It is essential that any levy placed on the energy suppliers for carbon capture is not passed on to hard pressed households and small businesses that are already facing increasingly large energy bills.

John Walker, National Policy Chairman, Federation of Small Businesses, said:

"It has been a tough year for small businesses, with shoppers spending less, larger companies paying their small suppliers later and banks only just starting to lend again, although often at high rates.

"Many are starting to feel confident about their future prospects and it is important that any legislation in the next few months, particularly on the banking sector, helps to develop the good feeling rather than being used to divide up the political ground ahead of the General Election."

Notes to Editors

The FSB is the UK's leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk

Contacts

Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 7592 8128 / 07917628998
Prue Watson: 020 7592 8121 / 07825 125695
Marc Shoffman: 020 7592 8113 / 07595 067068

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