In advance of this year’s Budget, the Federation of Small Businesses (FSB) has called on the Chancellor to build on measures already announced, maintaining the focus on enterprise and encouraging small businesses’ growth – the key to the UK’s long term economic prosperity.
An increasing number of small firms want to grow and the Budget should create the right environment to meet these aspirations.
The FSB believes this should be done through completing reforms in key markets such as banking and energy, making Government support relevant to small firms through better focused schemes and reforming the tax system to support enterprise.
By doing that, small firms will be able to play their part in creating well paying jobs and further encourage the UK’s budding enterprise culture.
The FSB has welcomed the Employment Allowance and the pledge to cut red tape but says momentum for pro-enterprise policies needs to be maintained to encourage job creation and sustained investment.
Decisions around the level of the National Minimum Wage (NMW) will be important: to support emerging confidence and intention to take on additional staff, any changes to the NMW must be based on the decision of the Low Pay Commission.
Furthermore, rises must be sensitive to economic conditions and the ability of firms to increase pay, especially those operating in sectors such as hospitality and care.
Momentum also needs to be maintained around the reform agenda, notably in the key markets of banking and energy, where more competition and transparency to work properly is needed.
In both markets, levels of switching are low and new entrants find it difficult to enter the market.
As part of efforts to increase competition and widen choice in the finance market, the FSB is calling on the Chancellor to boost Community Development Finance Institutions (CDFIs).
CDFIs can play an important role in providing finance to small firms which are not able to access bank finance. The FSB therefore wants to see them have an increased scale and market presence as they do in other countries, notably the USA.
Gordon Millward, regional chairman, Federation of Small Businesses, said:
“FSB research continues to show increased confidence across all sectors and notably in members’ investment and employment intentions.
“With the recovery underway it is important that businesses begin to feel the measures already announced are having a positive effect on their business.
“This is why the Chancellor should look at ‘focus and delivery’ for initiatives already announced to create long-term growth.
“The FSB has welcomed the Government’s recent moves to support employment, notably the Employment Allowance and a pledge to cut red tape.
“The focus now needs to be on addressing fundamental structural issues.
“Getting more competition and transparency in key sectors such as energy and financial services will greatly help small firms.”