09/02/2009 - 'Urgent' help needed to save firms
The Government has been warned that the credit crunch will get worse without "urgent" intervention, suggesting that the measures already taken are not working.
According to the Federation of Small Businesses, a survey of 4,000 companies found that moves aimed at guaranteeing bank lending and boosting consumer spending were having "no impact".
Half of those questioned said they had seen their trade decrease in the past two months, despite the 2.5% VAT cut.
Meanwhile, the Confederation of British Industry (CBI) reported that two thirds of firms were still having problems accessing credit and receiving payment from customers in both the private and public sectors, and a similar number feared the situation will deteriorate further.
CBI director general Richard Lambert said: "We have urged the Government to move as quickly as possible to set out when the various support packages to tackle the credit crunch will come into effect and to implement them quickly.
"Day by day, constrained credit is damaging our economy. A lack of clarity creates a fear, the worst mentality, and could be costing people their jobs."
He added that the credit crunch was affecting everyone across the whole of business.
Copyright © Press Association 2009
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