VAT cut has not worked

10th February 2009, 9:28am

Government action to stimulate the economy is not working, the Federation of Small Businesses (FSB) warned today, after a member survey found that the recent VAT cut has had no impact.

The FSB poll of more than 4,000 small businesses showed that over half have seen their trade decrease in the last two months - despite a cut of 2.5% in VAT last November.

97% of small businesses said the VAT cut from 17.5 per cent to 15 per cent, as announced in the Chancellor's Pre-Budget Report in November, has had no impact on their trade at all.

John Wright, FSB National Chairman, said: "These startling figures show there is still more to be done by Government and the banks to ensure businesses can survive in this economic climate. Small businesses are doing all they can to survive the recession but they need better support from the Government, the banks, and the public and private sector.

"The small business sector is a vital source of employment and turnover for the UK economy, especially during these tough times. But these figures show that there is still an avalanche of stumbling blocks stopping this vital sector from surviving and recovering."

Related Articles:

• 09 Dec 2009 - The VAT increase will add six pence to the price of a pint of beer
• 04 Mar 2009 - Restaurant industry will return to growth in 2010

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