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Many businesses are upbeat about government spending cuts

Many businesses are upbeat about government spending cuts

95% of British business leaders and contractor accountants have a clear conscience about making staff cuts in the next few months according to statistics from Abbey Legal Protection.

While that leaves just 5% of bosses stressing about downsizing, 31% of employees are concerned that their job might be in jeopardy.

Andrew Hawes, one of the co-founders of manufacturing consultancy Newton, said that most CEOs recognise that cuts are inevitable and tough measures need to be taken to ensure their firm survives.

We are still waiting to hear the results of the government’s Comprehensive Spending Review but almost three quarters of SMEs and contractors agree that public spending cuts are essential.

The FSB intends to inform the Conservative party conference that the coalition should reduce the budget for ‘direct’ business support to £500m from the current £1.9bn and concentrate on micro business spending.

The lobby group thinks that business support receives too much funding and of that, micro firms only receive 5% of the money. It would also like to see the NICs holiday for new businesses extended to all firms, an increase in the VAT threshold to £90,000 and the privatisation of the Capital for Enterprise finance initiative.

Meanwhile, leading players in British industry have differing views of the upcoming spending cuts.

Babcock, the defence group, believes the clampdown in the public sector will lead to more projects being outsourced. It says it has a healthy pipeline of bids both at home and abroad and an order book currently standing at £12 billion.

Smiths, on the other hand, said it will be increasing investment in new products with a higher margin as it warned of the short to medium term challenges of achieving sales growth.

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