Government should help growing firms more, says CBI

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With the Budget due on 19 March, there have been calls from the CBI, the business lobby group, for more help to given to Britain’s growing small and medium sized enterprises.

Calling on the Chancellor, George Osborne, the CBI have asked that companies should have better access to funding by supporting alternative financing solutions and increasing competition in the banking sector. They also talked about the need to support companies dealing with increasing energy costs.

Director general of CBI, John Cridland, said: “We need to nurture the UK’s vibrant alternative finance market and encourage even more competition in banking so that businesses can get growth capital.”

Cridland has specifically raised the idea of using equity finance. This is the process whereby a company raises funds by selling off stakes in their business. He has suggested this could be a favourable route for companies struggling to bring in money.

To encourage this practice, the CBI wants to see the Government bring in an incentive to make investors be more willing to get on board. Their idea in the introduction of a relief on capital gains tax.

According to Cridland, “Many smaller firms say they would be more likely to use equity finance if the investment was longer-term, which is why we want a tax incentive to encourage this.”

The CBI have also called for the freezing of the carbon price floor, a tax on fossil fuels, and the freezing of air passenger duty.