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Don’t forget small businesses, the FSB urges Milliband

Don’t forget small businesses, the FSB urges Milliband

The waiting is over and Ed Milliband just managed to win the Labour leadership battle against his brother David.

The FSB is urging Milliband not to forget that small businesses and freelancers are essential to the UK’s continued economic recovery. A survey of 4,000 of the Federation’s members found that 75% of them want to see a simplified tax system in the UK whilst 33% are concerned that the growth of their business is hindered by too much red tape.

The National Chairman of the FSB, John Walker, wants to remind Mr Milliband that SMEs are the largest employer in the UK and as such are vital if the UK is going to continue along the road to economic recovery.

One of the problems that all the party leaders have to tackle is the current crisis within our banking system. There is a lack of competition amongst the high street banks and this has led to the banks lending less. Figures from the Bank of England showed that the crisis surrounding small business lending still exists and companies that have received funding are paying high interest rates on their loans.

Last Monday, Vince Cable stressed that the banks must do more but will they listen? At the moment nearly 500 SMEs collapse every week and yet the banks do have the money to lend.

In the 12 months from July 2009, the banks received £47 billion more in loan repayments than they advanced in new loans. This shows that the larger organisations are repaying their loans but the banks are reluctant to hand out new loans. If we are to avoid a double dip recession, this trend has to change, and quickly. But is the current government strong enough to force the banks into submission?

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