With inflation soaring, FSB warns that more targeted support is needed to help small businesses
Responding to new Office for National Statistics figures which show 14.3% growth in the headline rate of input prices in the year to November, and a 5.1% rise in the consumer prices index over the same period, Federation of Small Businesses (FSB) National Chair Mike Cherry said:
“It’s not only Plan B restrictions that small firms in England are having to grapple with as we commence the 10-day countdown to December 25th.
“Surging operating costs, labour shortages and supply chain disruption are adding to the nightmare before Christmas being experienced by millions of small business owners.
“The imposition of Plan B means a new set of rules for small firms to get across, and a further hit to already suppressed consumer demand for festivities, in an environment where high prices are already eroding returns. Despite that fact, business support measures have not been adjusted to reflect new realities.
“Many small businesses – especially those in the hospitality sector – which were thriving at the start of last year are now struggling to make ends meet because of a coalescing of factors beyond their control. This supposedly pro-enterprise government needs to step up.
“It should reinstate the Covid sick pay rebate so smaller firms can recover the cost of supporting those who need to isolate and relaunch the workplace testing initiative – enabling test and release in scenarios where staff are pinged at work.
“To directly assist firms with the spiralling costs of doing business, the current 66% business rates discount for hardest-hit firms should be increased to 100%. Coupling that adjustment with an increase in the targeted Employment Allowance to £5,000 would make a real difference.
“Policymakers also need to accelerate delivery of the £1.5bn business rates relief fund. It was launched many months ago, but is yet to pay out a penny.
“Firms need greater clarity – both in terms of exactly what’s expected of them in relation to Plan B as well as transparency around what Plan C would look like – so they can plan ahead.
“Small business confidence dropped every quarter this year, and we’ve lost 400,000 small businesses over the pandemic to date.
“As we hurtle towards the introduction of import checks in January and a hike in the jobs tax that is national insurance contributions in April, the government needs to act now to prevent further long-term scarring of the small business community.”