FSB calls on Chancellor to make history with ambitious Budget
By Rob Freeman | 18th February 2021
Chancellor Rishi Sunak has been urged to create the "most pro-business Budget in modern history" after research highlighted gaps in the support packages.
Analysis by the Federation of Small Businesses showed 56 per cent of furloughed workers are employed outside the hard-hit retail, leisure and hospitality sectors - including suppliers - but only 10 per cent of grants cover those firms.
A survey of more than 1,000 small business owners found 22 per cent have received no financial help from the Government since the start of the pandemic, while a separate study showed only 51 per cent have been able to access a cash grant with just five per cent receiving any discretionary help from their local authority.
The research revealed 34 per cent have seen their business rates rise over the past five years, one in 10 saying their bill "has increased by a lot".
Almost a third (32 per cent) of those with rising bills say they would be more likely to take on staff if their rates bill fell and 26 per cent would be more likely to take on an apprentice.
As a result of the findings, the FSB is calling on the Chancellor to:
- Extend cash grants and business rates reliefs to those within supply chains suffering from severe falls in revenue.
- Extend business rates exemptions introduced at the start of the Covid crisis to 2022 and permanently bring the rateable value ceiling for small business rates relief up to £25,000.
- Introduce a fresh retention bonus for employers who bring staff back to work from furlough and reduce Employer National Insurance Contributions before the retention scheme closes while creating new support mechanisms for those out of work and thinking about launching an enterprise.
- Extend flagship support schemes to cover the full periods over which restrictions are in place and adopt FSB's proposals for bringing those with 2019/20 tax returns into scope of the Self-employment Income Support Scheme and launching a Directors Income Support Scheme.
- Reinvigorate efforts to end the UK's late payment crisis, strengthening corporate Audit Committees to take action against poor practices made worse during COVID against a backdrop in which firms that start to trade again in the summer may not be paid until the autumn.
- Build on Pay As You Grow to move the UK's small business community out from under an unsustainable debt mountain, considering tax liability and employee ownership models.
- Provide a roadmap to reopening which encompasses measures to facilitate digital adoption, investment and upskilling within small firms.
FSB national chairman Mike Cherry said: "The Chancellor's plan for jobs will only succeed with the right plan for businesses.
"Firms need help to bring furloughed workers back in the near-term alongside long-term measures to help them manage the ongoing impact of lockdowns.
"While the Government rightly moved at pace last Spring to deploy business support, we can now see the shortcomings of a sector and property-based approach."
He continued: "Small firms which sell to other businesses outnumber those which sell to consumers three to one - thousands don't have a commercial premises or neatly fit the definitions of retail, leisure and hospitality. Too many have been left out of support measures as a result.
"We urgently need to see support measures extended to the hidden heroes within our supply chains who tirelessly drive our economy forward. It's not too late to bring those left out into the fold, but the Chancellor needs to act fast.
"Equally, the worsening of our late payment crisis will impact small firms for many months to come - a lot firms taking on work now will not be paid until the summer, if at all. The Chancellor should use this Budget as an opportunity to show real leadership on this front.
"Last year we suffered the biggest GDP drop in modern history. We now need the most ambitious, pro-business Budget in modern history to reverse the damage."
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