Pre-Budget 2008: Help for businesses
The chancellor Alistair Darling has announced a £7 billion package of measures for businesses in his pre-Budget report.
In his pre-Budget report speech to Parliament, Mr Darling announced a £4 billion deal with the European Investment Bank to allow the banks to lend to small businesses.
In addition, a £1 billion small business finance scheme will allow small firms to borrow with more flexible terms.
Mr Darling also welcomed the commitment from Royal Bank of Scotland to maintain overdrafts and said this should be the benchmark for all UK banks.
As for tax relief, the government will defer the increase in small business corporation tax, leaving the tax rate for 2009 unchanged.
Around 70 per cent of empty properties will be exempt from empty property tax, Mr Darling added.
Mr Darling repeatedly said he would help businesses and families through the credit crunch and the recession, which he said would continue into next year.
“I will do whatever it takes to support people through these difficult times,” Mr Darling said.
“This is an unprecedented global crisis,” he said. However, the chancellor said with this Budget, he was “confident that the slowdown will be shallower and shorter than would have been the case.”
The tax cuts will be funded by borrowing, which will reach £78 billion this year and rise to £118 billion, or eight per cent of GDP, next year.
Allowing borrowing to rise is the right decision, Mr Darling insisted, but the government will also make further efficiencies to save money.