Measures in Autumn Statement should stimulate increased demand says BPIF
With the economic outlook now looking far more fragile following the latest downgraded OBR forecasts the Chancellor has taken a number of helpful steps that should stimulate increased demand, says the BPIF in its response to Tuesday’s Autumn Statement.
The BPIF is pleased to see an extension of the business rates holiday for small businesses to April 2013 and the provision of more funds for small businesses through the new National Loan Guarantee Scheme, which should help reduce the cost of finance for small firms and increase the amount of lending available. However with latest Bank of England figures showing that lending fell in the last three months, the BPIF is disappointed by the lack of any measures to promote the emergence of alternative forms of finance: one of the BPIF’s earlier calls for action in its ‘Priorities for Print’ lobbying brief is for “greater competition in the lending sector, in order to increase the supply of funding for investment in new and replacement technology”
The BPIF also welcomes the £1bn increase to the Regional Growth Fund and the additional spending on infrastructure announced, as well as measures to leverage private sector investment on infrastructure for roads and energy. Larger and more energy intensive printers will benefit from a £250m package to compensate them for the cost of the carbon floor and EU emissions trading system, but this should also help printers indirectly by bringing some relief to ink and papermakers facing hefty energy cost increases. Although the cancellation of next January's fuel duty increase is also welcome therefore, the BPIF warns that the 3p rise planned for January next year will still come in August.
The BPIF has repeatedly urged Government to ensure that public procurement decisions give proper consideration to value for money, financial security and sustainability offered by suppliers, and that purchasing choices are not made solely on price considerations. It is therefore encouraged that the Chancellor has confirmed that “the Government intends to make it easier for UK-based firms to compete for government procurement contracts and make new application out of Government data”. Although the BPIF is pleased at the steps taken to date by Government to simplify the paperwork required to apply for public sector contracts in an effort to encourage more applications from small companies, such as removing the requirement for onerous “pre-qualification questionnaires” (PQQs) on contracts below £100,000 and introducing the new ‘Contracts Finder’ online database of government contracts, it is vital that small firms are given every opportunity to win these contracts.
BPIF CEO Kathy Woodward said: “Overall, the announcements in the Autumn Statement do address some of our concerns in key areas such as business rates and fuel costs, and should serve to stimulate demand by boosting infrastructure investment and credit easing. We also welcome the government’s efforts to improve access to finance for businesses but would like to see further steps taken to increase available sources of funding and lower financing costs by encouraging greater competition in the lending market”.