In its Budget submission to the chancellor, the Federation of Small Businesses said such a facility could be established quickly, as has happened in France and Belgium.

 

“Forcing banks to behave and solving the problem of rising unemployment should be at the top of the government’s to-do list,” it said. 

 

The mediation service would be available to any business owner encountering difficulties with banks in solving financing problems. In a survey of FSB members, a third said their bank was less helpful now than before the credit crunch began.

 

The FSB said a corporate mediator could communicate the array of support packages on offer and would be better placed to report the true situation regarding business lending.

The federation wants a rise in income tax and National Insurance thresholds to £10,000 ($14,272) in order to put money into employees’ pockets and cut the cost of employing staff.

 

It wants relief from business rates for small companies of up to £1,200 a year to be made automatic in England, as it is in Wales. Every year more than £400m goes unclaimed by eligible businesses.

 

The FSB repeated its call for wage subsidies for companies that adopt short-time working or temporary lay-offs. It said 600,000 workers a year could receive support for an annual cost of about £1.2bn.

 

Copyright The Financial Times Limited 2009