By Lindsay Muir and Joel Sked
Small business owners in Edinburgh are divided over Labour’s new tax proposals the Dunedin Napier News has learnt today.
Labour have set out a number of measures which in the short-term will help many businesses overcome the credit crunch which has threatened to put the country in a fierce recession.
The main points that have been set out is to defer the planned rise in corporation tax for a year, to make it easier for firm to borrow between £1,000 and £1m through a £1bn temporary state scheme, the ability for small firms who are struggling with payments to spread them out over an affordable timetable and an extra £1bn in support for exporters.
Although there are differing views on the High Street as to whether the new budget will help businesses survive the credit crunch.
Neil Finlayson of Finlayson Hayles Estate Agent on Gorgie Road believes that the recent cuts in VAT will have very little impact in the businesses long-term survival.
He said:”It is only a 2.5% decrease in VAT which means that items that cost £117.50 will now cost £115.00 for example. And that is not going to attract consumers. It is just like a 2.5% sale. To make it worthwhile it would need to be at least a 20% decrease.
Finlayson also believes that the housing market will get worse before it gets better.
He carries on: “The market will bump along until it hits rock bottom. From there it will start to pick up again.”
Although Stella Ross of Johnson’s Delicatessen also on Gorgie Road believes that if the shop was not closing down due to other factors it would have been a great help.
She said: “The owner was delighted with the report and the proposal to cut VAT and help businesses thrive in these difficult times. It would have helped keep us ticking along without worrying about closing down because of money problems.
“Now it means there is even more of an incentive for prospective business owners to set up their business and run them profitablly. They are making it easier for them to borrow money therefore giving new owners are starting base to build their business.”
Labour will hope that the recent budget will help maintain small business in this recent turmoil and encourage those thinking about opening their own business to do so.