Should taxpayers bailout small businesses in the short term?

The revelation that six major banks in the UK are coming together to create a £1.5 billion fund to assist the short to medium term funding issues of small operations in the UK has been welcomed across the board. However, there is speculation that the UK government is under pressure to become actively involved in the bailout funding although taxpayers will question why they should be stumping up significant finance to fund small business operations.

The truth is that unless we see an improvement in the small to medium-sized business arena the UK economy could effectively sound the death knell to many operations in this area. There are many businesses which are in need of short-term finance to see them through these difficult times but have excellent medium to long-term prospects, which would assist the UK employment market. So in effect an investment in the small business arena and even the medium-sized business arena is an investment for the future in the UK jobs market.

However, UK taxpayers will be seriously concerned with regards to any return on this proposed investment because the multibillion pound investment in the UK banking arena has so far failed to deliver any meaningful benefits.