Small firm fears over rising costs

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Small firms are calling for action in the face of soaring costs and rising rail fares.

Responding to Office for National Statistics (ONS) figures showing that the retail prices index (RPI) hit 3.8% and the headline rate of input prices showed growth of 9.9% in July, Federation of Small Businesses (FSB) national chair, Mike Cherry, said:  “Unless urgently addressed, inflationary pressure will stifle recovery among the small firms that make-up 99% our business community.

“While consumer costs have cooled, it’s a different story for inputs, with producer prices continuing their upward march this month. Two thirds of small businesses say operating costs are up year on year, a huge increase compared to the start of 2021, with inputs, labour and utilities all cited as major contributors to that rise.

“Added to the rising cost of goods are the rising fees charged by shipping and courier companies, with many of our international-facing members reporting steep increases in the prices they pay to move goods around the world. Close to a quarter of small exporters have now stopped selling into the EU either temporarily or permanently, citing growing costs and admin.

“A reliable and fairly-priced public transport network is fundamental to the success of the small business community. An RPI-linked hike in rail fares would mean yet another soaring cost holding our employers and sole traders back. Environmentally, small firms very much want to play their part in working towards the Government’s net zero emissions target. A fares hike of this size means for both businesses and consumers that taking the train becomes a strain.

“With firms now having to manage debt repayments, rent arrears, business rates and skills shortages on top of rising prices, the Government should move swiftly to mitigate the effects of soaring costs.

“Bringing down Employer National Insurance Contributions – which serve as a jobs tax in an environment where many are struggling to recruit – would be a good starting point.”

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