Today’s reported record annual slump in the economy demonstrates a need for pre-Budget action, the Federation of Small Businesses is saying.
Responding to the latest Office for National Statistics (ONS) figures which show a 9.9% drop in UK gross domestic product (GDP) over 2020, FSB national chairman, Mike Cherry, said: “A fall in GDP of this magnitude isn’t just an economic statistic. It is missing businesses, missing jobs, and livelihoods in tatters.
“We urgently need to see the Government come forward with its road map to recovery. The success of its plan for jobs will hinge on the right plan for small businesses and the self-employed. Action in the coming weeks, before a pro-business Budget next month, would mark a real statement of intent.
“A big share of the welcome business support provided to date has been directed at consumer-facing firms, but those who supply to them are also in real trouble. It’s simplistic to see this as a crisis affecting only a handful of sectors. It’s simply not good enough for government to ignore small suppliers.
“Thousands of small firms down supply chains – many of which sell to retail, leisure and hospitality businesses – are not benefiting from rates relief or cash grants. They are being overwhelmed by costs and are often at the sharp end of a worsening late payment crisis. Extending current measures – and building new ones – to help suppliers is essential. Creating fresh measures around assessments of lost revenue, rather than property or industry, marks the way forward.
“With unemployment rising, firms are crying out for renewed efforts to promote job retention and creation. Cutting employment costs – by reducing employer National Insurance Contributions or reintroducing a job retention bonus – would have a real impact, helping employers to get staff off furlough and into work. The Government needs to take concerted action to get people back into work, and it’s senseless to wait until furlough ends to start doing so.
“We also need to encourage those who are out of work and thinking about starting an enterprise to take the plunge. That means funding for the Start-up Loans Programme and New Enterprise Allowance alongside the introduction of a fresh Kickstart Start-Up initiative.
“Equally, those who have been left out of income support initiatives – including directors and the newly self-employed – must now be brought into the fold. They have suffered an incredibly long, stressful eleven months.”