Help Small Business

Writing below, Jo Swinson MP explains why she has urged East Dunbartonshire Council to take up a new scheme modelled on Islington Council in London, designed to help small businesses through the credit crunch.

With the impact of the credit crunch becoming more and more deeply felt, nobody should be in any doubt about the tough economic times we are facing. The situation is now being described by Vince Cable as a “national economic emergency”. The downturn in the economy is making life more difficult for consumers, homeowners and businesses.

Small businesses are finding credit harder to come by, as the banks retreat into a much more cautious credit lending regime. A lack of credit makes a quick, reliable cash flow all the more important for companies with staff, energy bills and suppliers to pay.

Against the backdrop of this pressure on local businesses, it is essential that East Dunbartonshire Council does all it can to help. Last month, Islington Council in London adopted a plan that will see its payment times for locally-based small and medium-sized suppliers cut to 10 days. Similarly, the UK Government has also pledged that public-sector clients will aim to pay small firms within 10 days.

I have written to the Chief Executive of East Dunbartonshire Council, urging the Council to adopt a similar approach to making prompt payments to local companies that provide them with goods and services. Matching the actions of Islington Council in East Dunbartonshire would ease the effects of lower levels of credit on small businesses by ensuring that they receive funds quickly when doing business with the Council.

With credit becoming scarcer for businesses, paying bills promptly and ensuring a dependable cash flow can make all the difference. A 10 day target for payments to small and medium-sized businesses is one useful step that the Council could take to provide some relief to those businesses feeling the strain.

Not even the experts are able to predict how deep or long lasting this recession is likely to be, but there is a consensus that it is the most serious one this country has faced for a long time. We have already seen banks, many of whom behaved in an irresponsible way, bailed out by the Government. Now the focus must shift to our local economies.

Small businesses are vital to the health of the economy in East Dunbartonshire; swift and effective action must be taken to support them, as happened with the banks. It would be tragic if we ended up regretting not having done more to safeguard the local businesses that give character and vitality to our communities.

Jo Swinson MP

December 2008