Offer to defer rate rises and a loan guarantee are met with scepticism
Government plans to support small businesses by deferring rate rises and attempting to reduce borrowing costs have been widely dismissed by retailers.
Chancellor George Osborne announced last week that small businesses would be able to defer 60% of next April’s 5.6% hike in business rates for up to two years. But a number of retailers have told C-Store they would not take up the offer because it would only prolong the pain.
Ramesh Shingadia of Londis Southwater in Horsham, West Sussex, said: “Where does it help you? It’s a cosmetic measure which will help with immediate cash flow, but you’ve still got to pay it eventually. In two years’ time you could be in a worse situation if you defer payments.”
Norfolk retailer Nigel Dowdney said: “It’ll help some businesses who want to expand, but I won’t take up the offer and I don’t want to get into debt. We’re a business and by nature we’re cautious with money.”
However, Cambridgeshire retailer Jonathan James said he would definitely take up the offer to defer the rate rise. “I will take any help available at the moment, although I appreciate I have to pay if off eventually.”
The Association of Convenience Stores (ACS) said only about 6% of businesses took up the last offer of a rates deferral under the previous government.
The chancellor also announced a £20bn National Loan Guarantee Scheme, which aims to enable banks to offer lower interest on loans to small businesses. Nigel said: “In the long run money needs to be loosened up by the banks so the loan scheme will be great if it works. It’ll help with business growth - it’s an excellent time for independents to be expanding, lots of people are looking for work.”
But Mayur Patel, of Saxon Fields Stores in Andover, Hampshire, was sceptical about the scheme. “The banks won’t follow the orders and pass on the money. The government needs to legislate to ensure they do.”