A tough time ahead but we’re on the right road for small business growth, says FSB
Commenting on today’s Autumn Statement John Walker, National Chairman, Federation of Small Businesses, said:
“We welcome today’s statement and we are encouraged by the Chancellors’ acknowledgement that small businesses need more help. We accept that bold actions are needed to boost the economy and we hope we are on the right road to helping small firms. The Chancellor has listened to many of our members’ concerns, and has put forward proposals to address these issues – notably around capital allowances, more encouragement for investors to place funding in small businesses, and cancelling the 3p rise in fuel duty. We now eagerly await further details on the small business bank which we have long seen playing a central role in opening up finance for small firms.
“However, it is clear from the Office of Budget Responsibility’s figures that the recovery will take longer than anticipated. Efforts must therefore be focused on boosting short-term growth where finances allow, and putting measures in place that raise the long term productivity of the economy. To that end, the additional funds earmarked for spending in key areas such as schools and infrastructure are to be welcomed. They should have a positive immediate effect across the construction industry and help boost the productive potential of the economy.
“Similarly, we agree with the Chancellor that we should fully explore options to make full use of gas resources to reduce energy bills and build on the UK’s expertise in this area. If these proposals are to come to fruition, the Government must remain steadfast in its determination to reform the planning system that has been such a block on growth for big and small businesses alike.”
Commenting on capital allowances John Walker, National Chairman, Federation of Small Businesses, said:
“It is an encouraging initiative that those businesses looking to invest in new equipment, machinery and vehicles for their business will get a tenfold increase in the amount they can invest tax free. This will boost investment which is needed to grow the economy and create jobs. This is a step in the right direction and recognition of the important role small firms will play in the recovery.”
“It will be a sigh of relief for all small firms that the 3p fuel duty rise has been cancelled. More than eight in 10 small firms rely on their vehicle for work. However we note small firms will face an increase in fuel duty in September 2013. Over half of small businesses believe that rising fuel prices are one of the main reasons for increased business costs. Government needs to take the politics out of fuel prices once and for all and look at ways of raising revenue that gives road users greater certainty as to what their overheads will be from one Budget to the next.
Finance and the small business bank:
“We eagerly await more information on the business bank over the coming weeks. While the bank will help to house all Government finance initiatives, meaning they are better signposted for small firms, it should also improve competition in the sector. For small businesses to grow and help economic recovery, they need better access to finance as it is clear that start-ups and the smallest firms still struggle to access finance they need.”
“Access to finance is a key barrier for small business exporters. Further export finance will help them secure the contracts they win overseas. The £1.5 billion export finance facility should provide finance to businesses promptly and be coupled with an awareness raising drive involving UK Export Finance and the main banks to make sure that small firms know about the products available.”
“We would urge caution before devolving significant funds to Local Enterprise Partnerships suggested by Lord Heseltine. Their development is patchy, and with their institutional capacity low, we would question their ability to deliver. We would also disagree they are the correct body to direct transport policy – there are other better options. Before committing ourselves to the path suggested by Lord Heseltine, we need a full discussion around the strategic direction for local economic development through a full and frank engagement with Government and the other business bodies.”
“Taking steps to diversify the energy mix and help ensure UK energy security is welcome and vital for UK competitiveness. Gas has a role to play in keeping the lights on and helping to keep prices down. However, the need to upgrade our ageing energy infrastructure will inevitably mean prices rise over the next decade. What is really needed is a radical reform of the retail energy market that strengthens household and small business consumer safeguards and increases competition in the market.”
“We are pleased the Government has listened to our call for improvements in the transport infrastructure, particularly the road network. FSB research has shown that the poor state of roads costs around half of small businesses up to £5,000 a year due to congestion and poor maintenance. We want to see the funding allocated to transport used to improve the immediate state of the UK’s road network as this will help small firms and we called for a Road Repair and Renewal fund in our submission to do this.
“It is good news that 12 smaller cities will get ultra-fast broadband. We now need the Chancellor to come forward and look at our proposal on a universal service provision to bring broadband to all parts of the UK.”
“We are disappointed that the Chancellor has not extended the current regional National Insurance Contributions holiday to all small firms across the UK. The current scheme has only been taken up by 16,000 new businesses. Our research shows that if it were extended to all UK-wide micro firms it would create 45,000 jobs and add £1.3 billion to UK GDP. We hope this is something the Chancellor looks at for Budget 2013 as the current scheme ends in September 2013.”
Notes to Editors
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The FSB’s reaction above is an immediate response to the Chancellor’s Autumn Statement 2012. Detailed examination of the accompanying report will be required before changes affecting small businesses can be fully evaluated.
Announcements relating to central taxation (income tax, national insurance, corporation tax etc) as well as matters of employment law (not Northern Ireland) and financial services regulation apply to all parts of the UK. Announcements relating to most other matters, including business rates, apprenticeships, transport and business support, only apply to England.
The FSB is the UK's leading business organisation with around 200,000 members. It exists to protect and promote the interests of the UK’s Real-Life Entrepreneurs, and all those who run their own business. More information is available at www.fsb.org.uk
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