The Finance & Leasing Association (FLA) and the Association of Chartered Certified Accountants (ACCA) will co-host a roundtable event on Friday to discuss with Paul Scully MP, Minister for Small Business, the practical measures that need to be included in the Comprehensive Spending Review to kickstart the economy.
Speaking ahead of the event, Stephen Haddrill, director general of the FLA said: “Business confidence remains fragile and will be dented further if the Government turns off the Coronavirus Business Interruption Loan Scheme (CBILS) just as we enter what could be a very uncertain autumn and winter period.
“There should be parity with Term Funding, which continues until April 2021.
“The direction of the UK’s recovery needs to lead to a levelling up of the regional economies to drive greater productivity, and positioning of businesses to ultimately achieve zero emissions by 2050.
“In the Comprehensive Spending Review, the Chancellor has an opportunity to set this course by encouraging investment – the basis of which is the availability of finance.
“Longer term, enhancing the existing Enterprise Finance Guarantee with the key features of CBILS, such as the 80% guarantee, would channel funding to businesses for new equipment and software that would transform productivity.”
The FLA is publishing its Recommendations for the Comprehensive Spending Review today, which expands on these points:
- Level up the regions – this will ultimately increase productivity, so the FLA will be recommending that key features of the temporary Coronavirus Business Interruption Loan Scheme (CBILS) – such as the 80% Government guarantee – are transferred to the existing asset finance variant of the Enterprise Finance Guarantee Scheme to improve its effectiveness in channelling finance to businesses for capital investment, like new equipment or software.
- Increase the take-up of ultra-low emission vehicles (ULEVs) – the FLA’s members currently fund 94% of all new cars purchased by consumers, so finance is critical to the rollout of ULEVs. Currently, capital allowances and the Annual Investment Allowance cannot be claimed by finance and leasing companies which purchase vehicles and lease them to businesses and consumers. If lenders, including leasing companies, could offset the purchase price of electric vehicles against their tax position, this would enable them to offer much more competitively priced finance or rental payments for ULEVs, putting them within the reach of more consumers and fast-tracking the UK’s progress towards zero emissions.
The UK has a well-established budgeting framework, through which a spending review is carried out approximately every 3 years to allocate funding to departments. This provides certainty for departments to plan ahead, the government said on its website.