16/02/2009 - VAT cut 'failed to help firms'
A survey by the British Chambers of Commerce (BCC) has revealed that nine out of 10 firms in Britain believe that their business has not benefited from the Government's VAT cut.
The cut in VAT was reported to have been of no benefit by 76% of companies, while 16% said it was a burden, according to the BCC's monthly Business Survey. Firms were also increasingly pessimistic about turnover prospects, with 43% of those surveyed predicting declines of up to 50% in the next three months.
Steve Hughes, economic adviser to the BCC, said: "The dangers facing the business community are plain to see in these results. Confidence in the economy is non-existent, and this requires an incisive response from government.
"Some of the Government's initiatives have been gratefully received, but the £12.5 billion VAT cut at the centre of the fiscal stimulus would clearly have been better spent elsewhere."
He added: "When the Chancellor gives his Budget in April, it must include measures to ease cash-flow difficulties and promote the retention of jobs. Cutting National Insurance Contributions, freezing the minimum wage and slashing business rates would all help hard-pressed businesses."
Copyright © Press Association 2009
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