The Federation of Small Businesses Calls for a Pro-Small Business Budget
As the UK approaches the much-anticipated Budget announcement on October 30, the Federation of Small Businesses (FSB) is making a clarion call to the Chancellor for a decisively pro-small business approach. With small and medium-sized enterprises (SMEs) expressing their frustration over stagnation, the FSB argues that this Budget represents the Chancellor’s “first and best chance” to foster sustainable, long-term economic growth.
The Current Landscape for Small Businesses
Recent statistics from the Office for National Statistics (ONS) paint a concerning picture for the UK’s small business sector. Between early 2023 and early 2024, the number of small businesses in the UK plummeted by 56,000, while employment within these firms fell from 16.7 million to 16.6 million—a 0.5% decline. These figures underscore the urgent need for government intervention to stimulate growth and support existing enterprises.
Key Recommendations from the FSB
In light of these challenges, the FSB has outlined several specific measures that the Chancellor should consider in the upcoming Budget:
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Enhancing Employment Support: The FSB advocates for a pro-business, pro-employment element within the plan to Make Work Pay. This includes increasing the Employment Allowance to automatically rise in line with the National Living Wage (NLW) and reintroducing a Statutory Sick Pay small employer rebate. Such measures would alleviate some of the financial burdens on small businesses, allowing them to invest more in their workforce.
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Encouraging Investment: To foster a climate of confidence for small businesses to invest, the FSB urges the Chancellor to take decisive action against the blanket use of personal guarantees on loans. Many entrepreneurs risk their homes to secure financing, and increasing protections for these individuals would encourage more investment in growth.
- Reforming Business Rates: The FSB is calling for a reform of the business rates system, specifically advocating for an increase in the threshold for Small Business Rates Relief from £12,000 to £25,000 of rateable value. This change would lift many small firms out of the burden of business rates, allowing them to allocate resources towards growth and innovation.
The Importance of a Pro-Enterprise Approach
Tina McKenzie, Policy Chair of the FSB, emphasizes the critical nature of this Budget for small businesses. She states, “Small businesses are sick of stagnation,” and urges the Chancellor to heed the call for a pro-growth Treasury. McKenzie highlights the personal stakes involved for entrepreneurs, who often face significant risks when making decisions about investment and employment. By addressing these barriers, the Chancellor can help small businesses thrive and contribute to the broader economy.
The Welsh Perspective
The FSB’s call for a pro-small business Budget is echoed in Wales, where Ben Francis, FSB Wales Policy Chair, underscores the importance of this moment for the Welsh economy. He notes that 99.3% of businesses in Wales are SMEs, making them a vital component of the region’s growth engine. Francis urges the Chancellor to articulate how the needs of Welsh businesses will be addressed in the growth mission, while also calling on the Welsh Government to implement proactive measures to improve the business environment.
Conclusion: A Call to Action
As the UK prepares for the upcoming Budget, the Federation of Small Businesses is making a compelling case for a decisive shift towards supporting small businesses. With the current economic landscape presenting significant challenges, the FSB’s recommendations aim to create a more favorable environment for SMEs to invest, grow, and thrive. The Chancellor’s response to this call will not only impact the future of small businesses but also play a crucial role in shaping the overall economic recovery of the UK. Now is the time for action, and the upcoming Budget represents a pivotal opportunity to set the course for sustainable growth.