FSB calls for cap on credit card charges in new year message

Small business must be supported and sustained in 2009 as they will be the key to bringing the UK out of the economic downturn, the Federation of Small Businesses (FSB) has said.

The FSB believes that small businesses can best be supported by a cap on interest rates on credit cards. According to the latest FSB figures, over 26 per cent of entrepreneurs use their personal credit card and over 23 per cent use their company credit card to finance their business.

The FSB is also calling on the Government, the banks, local councils and consumers to play their part during the year by providing support to small businesses in fighting regulation, accessing finance and maintaining cash flow to buck the increasing trend of business closures.

The FSB would like to see the immediate implementation and active promotion by bank branch managers of the Small Business Finance Scheme. The £1 billion fund should make vital credit available to small businesses who are suffering with higher operating costs, decreased trade and poor access to loans and overdrafts.

Action also needs to be taken to ensure that businesses are paid on time to keep their cash flow going and more must be done to limit the tide of regulation drowning small businesses. Additionally, the Government and local authorities can do more to preserve our local high streets by adopting the FSB’s Keep Trade Local campaign proposals.

FSB National Chairman John Wright said:

“With base rates at 2 per cent and falling, the Chancellor and the Governor of the Bank of England must look into capping interest rates charged on credit cards. A cap on interest rates will at a stroke not only reduce business costs but give consumers a real boost and cut the cost of borrowing.

“2009 must be a year of action for small businesses. The small business sector is the sector to see the UK out of the recession. Small businesses are innovative, enterprising and flexible. But an increase in late payments, a decline in trade and poor access to finance will leave thousands facing closure in 2009.

“Small businesses can and will play a pivotal role in driving the UK economy out of recession and onto the motorway of recovery. There will be many side roads and nooks and crannies but with support from the Government, the banks and others, we can all reach a destination in 2009 that takes us out of the dark tunnel of recession and onto the bright road of recovery.”

ENDS

Notes to Editors

1. The FSB is Britain’s leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk.

2. To view the full message visit www.fsb.org.uk/newyearmessage2009

Contacts:

Stephen Alambritis: 020 7592 8112/ 07788 422155
Sophie Kummer: 020 7592 8128/ 07917628998
Prue Watson: 020 7592 8121/ 07825 125695
Marc Shoffman: 020 7592 8113/ 07595 067068

For regional FSB contacts please go to www.fsb.org.uk/regions.