FSB press release
Responding to the Chancellor’s Spring Statement, in which Rachel Reeves confirmed a halving of the official growth forecast for this year, Policy Chair of the Federation of Small Businesses (FSB), Tina McKenzie, said:
“Today’s growth figures are a stark reminder of the urgent need to get the economy moving. The whole of Government must now step up and produce credible, pro-small business plans to achieve that.
“Every Government department bears responsibility for growth and every cabinet minister must come forward at the upcoming spending review with proper plans to back small business growth and therefore growing the economy as a whole. From better programmes to support small business tech adoption, to introducing a Statutory Sick Pay rebate to help cover the extra costs being imposed on small employers, small firms want to see Government money well spent and targeted to support growth.
“FSB’s latest quarterly Small Business Index revealed confidence levels among small businesses at their lowest since the first year of the pandemic. That needs to be turned around, and fast.
“The Chancellor has rightly kept her word not to increase business taxes again and we urge her to go further in her next full Budget and actually lower the tax burden, including delivering on the promises made by Labour in opposition to transform the out-dated business rates system and make it fit for purpose in a modern economy. Freeing up funds for small firms to invest in their business rather than having money swallowed up in high taxes is the best way to achieve growth.
“There should be no doubt that the Government can deliver a better environment for small businesses, including as taxpayers. We therefore welcome the Chancellor’s commitment to open up defence procurement to more small firms. Pressure on the Government’s finances can be significantly eased by opening up contracts across Government to more smaller suppliers – providing greater competition and better value for taxpayers, as well as keeping more of the cash from taxpayer-funded contracts in local economies across the UK. This is a crystal-clear example of how improved commercial acumen can deliver savings while increasing value. Each and every Government department should do the same.
“Many small employers are worried about next month’s rise in employer national insurance contributions (NICs). While the Chancellor’s decision to double the Employment Allowance – as a result of FSB campaigning – will take all employers out of the first £10,500 of the jobs tax, there is a reality that this will only partially shield many from the overall NICs rise, and their bill for employing people will therefore be higher, adding to the overall tax burden.
“For this to be coupled with legislation that makes it more risky and expensive to employ people is a dangerous combination. The ambition to support more people into work is a good one. But there need to be jobs to be filled. The Government needs to listen to the feedback from business on the Employment Rights Bill and change the elements which are most likely to act as a deterrent to job-creation.”
Ends
Notes to editors
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- FSB’s latest Small Business Index is available here.
About FSB
FSB is a non-profit, non-party-political grassroots business organisation that provides its members with a wide range of vital business services. These include advice, financial expertise, legal support and a powerful voice heard in Government for over 50 years. More information is available at www.fsb.org.uk. You can follow us on X/Twitter: @fsb_policy; on LinkedIn: FSB Westminster; and on Bluesky: @fsb-uk.
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