The Federation of Small Businesses (FSB) today warned that the Chancellor’s budget largely ignored the small businesses that are at the heart of job creation and economic recovery.

Cautiously welcoming the Chancellor’s focus on jobs in the Budget, the FSB reminded Alistair Darling that small businesses must not be forgotten if jobs are to be protected.

Small firms are the economy’s job-creators, the FSB said, and will be at the heart of creating the lion’s share of jobs under the Chancellor’s £250m boost for job programmes and its new scheme to target under-25s. Employers in the small and medium sector are quick to create jobs, taking advantage of opportunities and incentives.

Cash continues to be king for small firms and the Government’s action to set up a trade credit insurance scheme is welcomed as an indication that it is listening to FSB lobbying. However, the Government should have gone far further to tackle late payments to small firms by giving Companies House the necessary clout to use powers within the Companies Act to name, shame and fine companies which fail to pay on time.

The FSB was disappointed that the Government failed to announce automatic rate relief for small firms. Around £400m has already been allocated by the Treasury to give relief to those firms which are eligible, but the Chancellor missed the opportunity to give those firms the immediate financial boost they need at this time.

The FSB also welcomed moves to bring reform to the banking industry, but wanted to see an independent corporate mediator put in place to facilitate dialogue between the banks and small businesses Mike Fisher, FSB Chairman for Herefordshire, said: “I don’t think this budget will do much to help Herefordshire businesses, which is disappointing to say the least. I had hoped that the introduction of an automatic Small Business Rate Relief scheme would have been an easy win for the Chancellor as the funding is already in place, a missed opportunity I think. Also, the increase in fuel prices will have a significant effect upon Herefordshire business owners as there is no realistic alternative to road transport in the county. Many local employers are involved in the food and drink processing sector, their costs can only escalate as a result of the 2p duty increase on fuel prices.”

John Wright, FSB National Chairman, said: “In what has been the most crucial budget in decades, the FSB is disappointed that small businesses have been largely ignored.

“We welcome moves to focus on jobs and job creation for young people, but we are very disappointed that this budget will do nothing for those firms which are doing their best to hold on to their valued employees. A Government funded wage subsidy for short-time working would have been a real help but was totally ignored.

“Small firms will also be disappointed not to have received the benefit of automatic rate relief. This will have boosted small businesses to the tune of £400m.

“With a quarter of business failures due to late payment and around £38,000 owed to small businesses at any one time, Companies House should have been given more powers to name, shame and fine companies which fail to pay on time. The Government has missed an opportunity to save thousands of businesses and the jobs they create.

“We welcome the fact that Capital Allowances for firms investing more than £50,000 will double to 40 per cent.

“Small firms will be sorely disappointed with the 2p rise in fuel duty from September.