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More than just snow hurting small biz

Time for Osborne to act, say SMB groups

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Yesterday's fall in GDP cannot be blamed on mere bad weather and shows the government must do more for small businesses or risk a double-dip recession, business lobby groups have said.

Yesterday, the Office for National Statistics said the GDP fell by 0.5 per cent in the fourth quarter of 2010, compared to 0.7 per cent growth in the third quarter.

Chancellor George Osborne said there was no way he would change policies because of "one very cold month".

The Federation of Small Business (FSB) said the year had brought nothing but bad news for smaller firms – including VAT rises, fuel duty and negative GDP.

John Walker, national chairman of the FSB, said the government could not just cut its way to growth. He said other countries had cut VAT in some areas, such as construction. Walker wants to see an extension to the National Insurance holiday and action on the manifesto pledge to introduce a fuel stabiliser.

The Forum of Private Business blamed slow movement on bank reform – notably their continued refusal to lend to small companies on an affordable basis and failure to act on late payments – which it said was doing more damage to the UK economy than snow.

Alex Jackman, senior policy adviser at the FPB, said the cold winter had had an impact but warned that "still not enough has been done to remove the shackles created by tax, red tape and the continued lack of affordable funding preventing SMEs from growing, creating jobs lost in the public sector and driving real, sustained economic recovery".

The complaints mirror remarks earlier this week from big business lobby group the CBI calling for government action to get the economy back on track... The group warned that the coalition had failed to show any imagination or vision for the UK economy beyond engaging in an orgy of spending cuts.

More on small business reaction to GDP numbers here. ®

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