The majority of privately-owned businesses in the Midlands believe that the provision of credit to businesses should be the Chancellor's top priority in his forthcoming Autumn Statement on Tuesday 29th November 2011.  With this in mind, more detail about the Chancellor's proposed credit-easing scheme will be eagerly awaited, according to tax experts at PwC.

The majority of privately-owned businesses in the region who attended a dinner hosted by PwC's private business team earlier this month said that access to credit was the biggest obstacle to their company's growth in the next five years, followed by inflation in the cost of goods and services and increasing regulation.

According to respondents, the most popular tax measure for business would be the removal of the 50% rate of Income Tax.

Chris Romans, partner and private business expert at PwC in the Midlands, said:

"Midlands businesses still view a lack of access to credit as a major barrier to their growth plans and in this survey they have a sent a clear message to the Chancellor to make this his priority next Tuesday. This was especially seen as a problem at the smaller end of the scale.

"For this reason, any announcements about the Chancellor's proposed credit-easing scheme to buy bonds from small businesses would be especially welcome. This kind of scheme would help to alleviate some of the pressures on privately-owned businesses but it will need to be well thought through and workable. It is also vital that the funds do flow to businesses that really need them as there is considerable anecdotal evidence that some recent lending to the SME sector has been to businesses that already have strong reserves and do not necessarily require additional funding."

According to tax experts at PwC, the Chancellor will be considering other pro-growth measures to boost enterprise while keeping their overall impact as tax neutral as possible.

Chris Romans, partner and private business expert at PwC in the Midlands, said:

"The Chancellor is having to be very creative with very little. In addition to telling us more about his proposed credit-easing plan, he is expected to announce a package of pro-enterprise measures, which could include the removal of some under-used areas of tax relief and some additional tax simplification.

"Further announcements about other headline-grabbing schemes to boost certain sectors of the economy are also likely - such as the proposed mortgage guarantee scheme. This scheme would allow the Government to effectively underwrite loans provided by lenders to first-time buyers in order to help kick-start the housing market.

"While our survey indicates that it would be a popular measure among Midlands businesses, it is unlikely that the Chancellor will opt to remove the 50p rate of Income Tax. The immediate cost in terms of reduced tax revenues may be difficult to justify in the current climate, regardless of the long term impact this tax rate could have on entrepreneurial and overseas investment."