The Federation of Small Businesses welcomes the Chancellor’s Autumn Statement as a step in the right direction to help small firms that are central to economic stability in the UK:
- Seed Enterprise Investment Scheme - The FSB is pleased that the Government has enhanced the scheme which will offer greater reliefs on capital gains and income tax for people investing in small businesses. This will give start-ups and fledgling businesses the chance to by-pass the high street banks and find alternative sources of finance.
- Credit easing – Extra funds should help to decrease the cost of finance for small firms and will hopefully increase the amount of lending to small businesses – especially with today’s figures from the Bank of England showing that lending fell in the last three months. However, the FSB has concerns that guaranteeing the loan books of existing high street banks may serve to reinforce their market position. The Government must therefore go further to promote the emergence of alternative forms of finance and greater competition in the banking sector.
- Employment - Measures that will reduce the risk of taking on new staff and increase job creation are welcomed and an overhaul of the employment tribunal system is also a step in the right direction. But with youth unemployment rising to record levels, the Chancellor needs to do more to stop this becoming entrenched. The FSB suggested extending the Work Trials scheme and reducing NICs payments for micro businesses that take on a young person (aged 16-24).
- Fuel Duty - Deferring January’s fuel duty increase is welcome, but a 3p rise is still coming and will hit small firms and households in August. The FSB is calling for a longer-term solution that not only takes the volatility out of fuel prices, but the politics as well. Small businesses need to be able to know what their overheads will be in six months time and that is why the FSB is calling for a true fuel duty stabiliser mechanism.
- Infrastructure - Plans to improve the country’s transport network are welcome. While these improvements will help small businesses, it is also vital that small firms are given the chance to win these contracts and other public procurement contracts.
- Small Business Rate Relief - Based on September’s inflation figure, businesses would have seen a 10 per cent increase in their business rates over the last two years. An extension to small business rates relief will be welcomed by many small high street businesses as a way to help manage their overheads.
John Walker, National Chairman, Federation of Small Businesses, said:
“Taken as a package, the announcements in the Autumn Statement address many of the concerns raised by small businesses and are therefore to be welcomed. The key now is for the Government to be consistent, and set to the task of translating these policy intentions into tangible actions on the ground.
“Targeting the rising cost of overheads is imperative to help firms weather the economic storm that could be heading our way, so measures to limit the rise in fuel prices and business rates are very welcome.
“Small businesses are struggling to access finance and so the enterprise investment scheme will open up new sources of finance for new and growing businesses. We hope that the banks will pass on the lower interest rates to small businesses and that more finance will be available.”