The Federation of Small Businesses (FSB) has branded the Chancellor’s Spending Review as a “missed opportunity”.
Chancellor Rishi Sunak today (Nov 25) warned that the UK’s “economic emergency” had “only just begun”, warning that the unemployment rate was set to surge to 2.6 million by mid next year.
He said economic output was not expected to reach pre-Covid levels until Q4 2022.
Responding, FSB national chairman, Mike Cherry, said: “A Government which claims to be pro-enterprise had very little to say today about the importance of business and private sector job creation.
“This Spending Review was a missed opportunity to help small business owners – not least those who have been excluded from support measures – and brings the need for a pro-business Spring Budget into focus. Rather than being a tax-raising Budget, it must have growth and recovery at its heart.
“Depending on the spread of Covid and restrictions over the coming months, very significant interventions may well be needed far sooner than the Spring. We will at least need to see meaningful action to spur business and job creation by the time the furlough scheme is reviewed in January.
“The economic forecasts outlined today are stark. Our hopes of recovery will hinge on the success of small businesses. We need to see far more from this Government where reducing tax on enterprise, facilitating start-ups and bringing down operating and employment costs are concerned.
“That said, commitments to a new UK infrastructure Bank, Levelling Up Fund and UK Shared Prosperity Fund are good to see. We’ve always said that replacing EU funding for business support would be critical as we move to a new relationship with Europe, and our recommendations have been taken on board.
“It’s vital that – as these new initiatives are rolled out – small firms are brought into the supply chains of capital expenditure projects and paid on time.
“The announcement of measures to aid the sharing of apprenticeship levy funds with small firms down supply chains marks an important step forward.
“For too long, our transport, broadband and mobile infrastructure has lagged behind other major economies. We welcome efforts to tackle this issue head on.
“The Government has listened to the expert Low Pay Commission where the National Living Wage is concerned, and that marks the right approach.
“We’ve heard an awful lot about Government debt today. We should also remember that previously thriving small firms have had to take on significant borrowing to keep the show on the road and pay for safety measures. Come the Spring, when repayments start to fall due, many will be extremely stretched. A pro-business Budget at that juncture will not just be important, but essential.”