David Cameron has called on the Government to provide “monetary activism” to help get Britain’s credit market moving and throw a lifeline to suffering businesses.
He described the Government’s action so far as “fiscal tinkering”, which “could end up costing a fortune without making anything better".
David said that a Conservative government would introduce a National Loan Guarantee Scheme, under which the government would back new lending, while making sure that banks still have the right incentives to assess risk.
He added the Government had set a “tax bombshell” under Britain’s small businesses, and laid out the Conservatives’ plans to provide properly funded assistance for tax bills and employment costs:
- Allow small businesses to delay their VAT payments by six months, providing a £10bn boost to help small firms with cashflow problems
- Cut the small companies tax rate to 20p and the main rate to 25p
- Cut employers’ national insurance by one percent for the smallest firms
- Introduce a £3 billion “tax breaks for jobs” scheme to reward companies who take on new staff
David said that thousands of small businesses had already gone to the wall, and added that “if those remaining don’t get the credit they need, thousands more healthy and hard working businesses will follow them.”