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Small firms hope
budget measures
will boost business
confidence
»»AS MEMBERS OF THE FEDERATION
of Small Businesses (FSB) gather for its
National Conference in Glasgow, a new
survey from the first quarter of this year
finds small business confidence at the
lowest level since 2013.
The results underline the importance of
positive measures to support small firms
announced in the Budget and the need
to maintain support in the face of tough
economic headwinds.
The significant drop in small business
confidence is one of the key findings of
the latest FSB Small Business Index. The
fall is most noticeable in London and
the East of England, but all regions of
the UK have seen declines. Scotland and
Northern Ireland are the least confident
areas overall, with both now in negative
territory.
‘We need a renewed
push for growth
and productivity’
The FSB suggests the cooling in
confidence is partly a result of uncertainty
about the strength of the UK and global
economy. However, FSB also found
a strong indication that a raft of new
challenges facing small businesses included the National Living Wage (NLW),
pensions auto-enrolment and plans to
introduce mandatory quarterly digital
tax reporting – were contributing to the
decline in business sentiment.
Sandra Dexter, FSB Vice-Chairman,
said: “Small business confidence
has clearly faltered, which is why
the welcome small business focus
in the Budget is so important. We
need a renewed push for growth and
productivity – with policy makers
delivering a sustained package of support
for ambitious small firms.
“The Budget included a number of
important measures to help smaller
businesses, particularly changes to
business rates which will see many small
businesses taken out of paying rates
altogether. Delivering on tax simplification
measures will be vital - as will be pressing
ahead with new investment in much
needed infrastructure. Taken together
these measures should help to boost
confidence and help small firms to grow
and succeed.”
While the findings of the FSB index
predate what has been a positive Budget
for small firms, they will nevertheless
prove a challenging read for policy makers
seeking to gain small business support
ahead of key 2016 Elections across the
UK.
The report was being published on the
same day Scotland’s First Minister Nicola
Sturgeon; Labour Shadow Chancellor
John McDonnell; and Leader of the
Scottish Conservatives Ruth Davidson,
were all due to address well over 1200
FSB members and other small business
owners at the SECC in Glasgow.
Expected to be at the forefront of
delegates minds will be the main barriers
to growth highlighted in the FSB Small
Business Index. The top five concerns
remain the strength of the domestic
economy, weak consumer demand, a
shortage of skilled staff, increases to
the cost of labour and the burden and
complexity of the tax system.
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As well as falling confidence, the FSB
report also reveals how small businesses
financial performance, productivity and
hiring intentions are all falling year on
year.
Despite the overall negative picture
painted by the research, there are also
several positive findings. Access to finance
has been a key priority for FSB for many
years, and with a record percentage of
smaller businesses successfully accessing
credit in the past quarter, it appears
important progress is now being made.
‘a sustained and
focused approach to
supporting smaller firms
can really pay off’
A related success story is the growing
alternative finance sector. Nearly one in 10
(9%) of small businesses which applied for
credit this quarter applied for peer-to-peer
lending or crowdfunding. This is up from
4% in Q3 2015 and 6% in Q4 2015 – more
than doubling in under a year. The share
of businesses applying for asset-based
finance, such as invoice finance, has also
increased since Q3 2015.
Sandra Dexter concluded: “The ongoing
improvements to small business finance
demonstrate how a sustained and focused
approach to supporting smaller firms can
really pay off. We now want to see a similar
focus and long term drive to simplify
the tax system, building on positive
announcements in the budget and the
work of the Office for tax simplification.
By doing this, we can boost small business
confidence levels and support long term,
sustainable growth.”
www.fsb.org.uk