20 February 2008, 16:39 PM
  • The chancellor, who will be delivering the first budget since the end of the Gordon Brown era at number 11, has to deal with what is described as one of the most challenging time for the British economy in nearly two decades. But, with rising costs, falling consumer confidence and a weakening housing market, retailers and small firms are left particularly exposed.

The Federation of Small Businesses (FSB), which is to make its annual submission to the Treasury on behalf of its members, hopes the 2008 Budget will be a moral boost after a difficult year.

John Wright, the organisation’s national chairman, says, “The past twelve months have seen small businesses receive a series of harsh body-blows from which they are still trying to recover. There was the increase in small business corporation tax in last April’s budget, then there was the CGT fiasco – it cannot be stressed strongly enough just how important small businesses are to the UK economy. It is vital they are given more help to innovate and prosper. More hindrance will only see them, and the UK, shoved further backwards.

“The year has already begun with the threat of a recession, which is difficult enough for small businesses to deal with, without having to contend with more obstacles put in the way by the Government. This wilting relationship between small businesses and the Government needs to be reinvigorated and 12th March will announce whether spring is in the air or whether frosty relations continue.”

The FSB wasn’t the only organisation to voice its expectations. The British Retail Consortium (BRC) wants to see Mr Darling take actions in several key areas including rewarding retailers’ environmental achievements.

BRC director general, Stephen Robertson, explains, “Retail plays a vital part in the lifeblood of the British economy, job creation, skills training and regeneration. With a slowdown underway, household budgets have tightened and people are more cautious about spending. As margins reduce, retailers have also been hit by higher costs. On Budget day, the Chancellor has the power to encourage further retail achievements and reduce new cost threats.

“Retailers are rightly proud of their environmental record, but compared with other industries they are being short changed on their efforts. The chancellor should avoid discrimination by giving retailers the same benefits enjoyed by other sectors when they invest in renewable energy.”