The government needs to take action to help small businesses

By Rich Wilcock

27th Feb 2023 | SME's and Start-Ups

Small business confidence is at pandemic levels and the Chancellor's spring statement is an opportunity to change that according to FSB's Daren Shaw (Image - Unsplash)
Small business confidence is at pandemic levels and the Chancellor's spring statement is an opportunity to change that according to FSB's Daren Shaw (Image - Unsplash)

The Federation of Small businesses (FSB) is calling on the government to act decisively in next month's budget to drive economic growth and in turn, help small businesses in the UK-wide recovery.

The Chancellor will deliver his spring statement next month and FSB is keen to see action taken to improve confidence amongst small businesses which is on par with levels during the UK's second lockdown.

FSB has proposed an agenda for growth which includes scrapping business rates for companies with a rateable value of up to £25k a year alongside increasing employers' employment allowance in line with the National Living Wage.

FSB has also suggested delaying the Government's plans to slash the Research and Development tax relief which has the potential to stifle growth in key sectors including tech and engineering.

And given the success the scheme has had in promoting and nurturing innovation; the FSB believe it should be prioritised over others to ensure that it continues.

Daren Shaw, FSB Merseyside and Cheshire Area Leader, said: "The decision to cut R&D tax credits for small businesses from April was rightly seen as astonishing."

He added: "The UK risks being left in an innovation wasteland if Jeremy Hunt does not take control of Treasury innovation policy and restore the single most successful industrial policy of the last decade."

"This move to stifle innovation must be reversed."

FSB also want to see action to help spur the labour market into action after the current labour shortages it has been experiencing. It proposes incentives for tax-free childcare and job participation schemes.

Daren is keen to see some decisive steps taken to improve the outlook for small businesses.

"There are many necessary steps for promoting economic growth that is now urgent. The Chancellor must make significant strides in multiple areas of policy in order to deliver real, noticeable returns and lead to strong growth.", he said.

He added: "Hopefully, there is a recognition in government that too many initiatives of the past have ignored the small firms that make up such a large part of UK businesses – they should be the focus when making economic policy.

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