Small firms need support as employment costs rise

Responding to a rise in the employment rate to 75.4 per cent, the highest level since records began, and a drop in the number of self-employed people by 30,000 to 4.76 million, Federation of Small Businesses (FSB) development manager for South & East Yorkshire, Claire Reading, said:  “Small firms have played a huge role in achieving the record-high employment rate we see today.

“With the national living wage and auto-enrolment contributions for employers rising this month, we need to see more support for small firms in managing the costs that come with making high employment a reality.

“Retailers are increasingly feeling the strain as rising employment costs are coinciding with another round of business rates hikes for thousands of small shops. Raising the Employment Allowance to £4,000 would go some way to helping ensure record numbers of people are still in work over the months ahead.

“Small businesses are preparing for a small Bank of England rate rise in the coming months. Any increase must be gentle enough for small firms to absorb, otherwise the BoE risks recent gains in economic confidence and investment.

“It’s concerning to see a drop off in the number of self-employed workers. We need to avoid an environment that’s increasingly hostile to the genuinely self-employed, forcing them to take permanent contracts. Only this month they were promised an end to Class II National Contributions which hasn’t manifested.

“Equally, they’re up against a Universal Credit system which, as it stands, poses a threat to UK entrepreneurship. We know it takes at least two to three years to get a firm off the ground. Enforcing the Minimum Income Floor for the self-employed after 12 months is anti-business, pure and simple. The Universal Credit regime should reflect this reality.

“The flexibility and ingenuity of the self-employed community has been vital to UK growth in recent years. It should be properly recognised.”


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