Small businesses which are the lifeblood of the West Midlands economy need urgent support, the region’s MPs have warned.
Local politicians issued a cross-party plea for support as the national parties in Westminster fought to prove who was most committed to backing the nation’s entrepreneurs.
Conservative leader David Cameron set out proposals for a package of Government aid, including a 1p cut in taxes for the smallest firms and a VAT holiday, giving businesses an extra six months to settle their bills.
And the Government said it was “absolutely focused” on helping small businesses get through the economic downturn. Gordon Brown has already pledged to ensure that Whitehall departments and agencies help struggling enterprises by paying their bills promptly.
But local MPs are demanding that the banks do their part to support small businesses.
Solihull MP Lorely Burt (Lib Dem) claimed that banks had been cutting off credit lines from small businesses, leaving them “snookered”.
She said: “I know from personal experience that banks never lend money without imposing conditions. Well, taxpayers have now lent the banks huge sums of money, and we shouldn’t hesitate to impose conditions of our own.
“As a condition of receiving help, the banks should help their own customers in turn – especially small businesses, which are the lifeblood of the economy.”
The plea has been backed by Labour MP Lynne Jones (Lab Selly Oak), who signed a House of Commons motion drawn up by Ms Burt which “deplores the actions of some banks in withdrawing crucial credit lines from small businesses.”
It will also be the subject of a Commons debate led by Ms Burt.
There are more than 175,000 small businesses in the West Midlands – 98 per cent of all firms in the region. Between them, they keep 885,000 people in work. But they face a series of challenges, including difficulties accessing credit and obtaining payment from large businesses for goods and services.
Ms Burt said local employers had told her many major companies had renegotiated their conditions. One has told suppliers they will be paid within 60 days of the end of the month in which an invoice is received – which means businesses may have to wait 90 days.
The Federation of Small Businesses warned the credit crunch was beginning to bite.