Reported on Mon, 13 Mar 2006

Small and medium-sized enterprises (SMEs) in the UK are being "repressed" by the government, claims the Confederation of British Industry (CBI), but a business loan can help small firms to make significant investments in new areas.

Ahead of its submission of recommendations to the chancellor as he prepares his Budget speech on March 22nd, the CBI has accused Gordon Brown of weakening SMEs by over-taxation.

John Cridland, deputy director general of the CBI, said: "Constant grabs from the Exchequer on business taxes are weakening our competitive position.

"As the chancellor has run out of money, his colleagues have been inevitably looking for other ways to fill the coffers."

Mr Cridland also accused HM Revenue & Customs of unfairly targeting businesses who legitimately plan their taxes, accusing the department of levying another "stealth tax".

Meanwhile, Ian McCafferty, chief economic adviser for the CBI, explained that significant savings could be made by reducing expenditure in the public sector, rather than increasing taxes on SMEs.

"It is possible to change the growth in public expenditure," he said, "without damaging frontline services".

If any reduction was made in terms of public sector investment, Mr McCafferty claims that businesses should be the main beneficiary as the government is spending a higher proportion of the country's GDP than ever before and "most of this has come directly from private business", he concluded.

A low-rate business loan could help enterprises to out-perform their rivals irrespective of the outcome of Gordon Brown's Budget.

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