The UK's small business community sees today's Autumn Statement as modest and medium-term
Paul Miles Rogers, Warwickshire & Coventry Chairman at the Federation of Small Businesses, said:
“Our members are pleased with the confirmation of plans to reduce business rates by £6.7 billion, and the decision to make rural rate relief fairer for small firms. We welcome Government responding to our calls to increase investment in local roads and digital connectivity to help rebalance the UK economy.
“We also back the £2 billion per year boost for research, development and innovation, plans to improve management skills, the £400 million to improve small business finance through the British Business Bank, and the doubling of export finance. The latter is vital as we need to reach new markets in the wake of the Brexit decision.
“Today’s statement is modest and for the medium term. There will need to be stronger fiscal interventions to boost the economy next year, with the prospect of weaker longer-term growth looming. Small firms want to grow, export, innovate, recruit and be more productive - and they need to know as soon as possible the framework they will operate in.
“We also call for Ministers to act to bring down the costs of doing business. Today's moves to tighten conditions for the self-employed must also be followed up with help to give them parity in benefits so that the UK's army of genuine self-employed people will continue to grow."
“The Government’s confirmation to permanently increase business rates relief will provide crucial support for small businesses. This will take 600,000 small firms out of the rates system altogether and will mean lower bills for many thousands more.
“FSB has campaigned on this issue for many years and we are delighted that from April 1st next year small businesses will start to benefit. We are particularly pleased to see that the Government listened to our calls to give rural businesses 100% relief on rates.
“Our members in London are facing huge increases in their rates bills in the wake of the recent revaluation. We still want Government to look again at increasing relief thresholds in the capital as the next major reform of the business rates system.”
National Productivity Investment Fund
“The new £23 billion fund announced today will help drive important improvements in productivity across the UK. Increased investment in transport, digital communications, housing and research and development (R&D) are all key priorities for businesses.”
“Many small businesses view problems with the local road network as a key barrier to growth and this is especially true in rural communities. The £1.1 billion in additional funding for the upgrade and maintenance of roads outside the Strategic Road Network should help deliver real benefits to small firms. This is a key win for our members who have consistently raised this issue. A further £220 million set to be invested in pinch points on the motorway network will also address frustration and delays.”
“Today’s £1 billion funding announcement is an important step in the right direction to improve digital connectivity with three in four (75%) small firms saying broadband is vital to their business. This investment should be targeted towards small businesses and business parks to have maximum impact.
“This investment is a welcome and timely development, and should help lead to faster broadband speeds across the UK. Beyond this investment, it is also important that the new Universal Service Obligation includes business premises to help those in the most hard to reach areas. A strategy is now needed to help businesses take full advantage of the digital economy which will help improve productivity and growth.”
“We will participate in the upcoming comprehensive review of housing policy to ensure its emphasis is on helping small house builders. In this review, we would hope to see changes to the community infrastructure levy to reflect the higher cost of building small developments. Our position has always been that this disproportionately affects smaller firms who can play a vital part in providing the new homes the Government has committed to build.”
Research & Development (R&D)
“We welcome the extra £2 billion a year by the end of this Parliament for supporting R&D. It is essential that this investment addresses the challenges specific to small businesses trying to develop their ideas and successfully commercialise them. FSB has championed universities having a strong role in their local economies. Government has recognised this and provided, within this funding, £100 million to establish greater technology driven collaboration between businesses and universities.
“R&D tax credits are an effective incentive for innovation in small businesses. However, only a minority access them so FSB is keen that the review focusses on much greater take up from the small business community.
“To date, Innovate UK has been an effective champion for small business innovation. We are pleased to see that alongside research councils, it will be managing the new Industrial Strategy Challenge Fund.”
“Freezing fuel duty at its current rate is the key ask from FSB members. It will provide a significant boost to small business confidence and stability and will be universally welcomed by our members. In recent research, 93% of small firms said cars are important to their business. Businesses across the country are heavily reliant on roads for customers, staff, and suppliers, and affordable fuel is a lifeline to those in rural areas.”
National Living Wage
“Government has listened to FSB’s concerns and has announced a more modest increase in the National Living Wage (NLW) to £7.50 per hour. The 4% increase is within the range of small business expectations.
“But small employers will need support, especially looking ahead to steeper increases to meet the 2020 target. Recent FSB research found that 47 per cent of small businesses cite labour costs as the main driver of the rising cost of doing business. For this reason, we are calling on Government to increase the employment allowance from £3000 to £4000 to help small businesses increase pay and create jobs.”
“FSB fully supports the Government’s aims to enhance the UK’s reputation as an internationally competitive business tax location. The decision to further lower corporation tax is an important statement of intent and will provide a welcome boost for affected firms. We hope the Government and the Office of Tax Simplification now builds upon this measure for small businesses by streamlining the tax system, particularly delaying implementation of mandatory quarterly tax reporting.”
Insurance premium tax (IPT)
“The Government’s decision to raise IPT to 12 per cent will increase the cost of doing business for all small firms across the nations and regions of the UK. Following the rise in IPT made in Budget 2016, FSB encourages the Government to provide certainty for small businesses by refraining from any future changes to IPT over the course of this Parliament.”
Notes to Editors
1) Autumn Statement 2016. Philip Hammond’s speech, https://www.gov.uk/government/speeches/autumn-statement-2016-philip-hammonds-speech
2) Announcements relating to central taxation (income tax, national insurance, corporation tax etc) as well as matters of employment law (not Northern Ireland) and financial services regulation apply to all parts of the UK. Announcements relating to most other matters, including business rates, apprenticeships, transport and business support, only apply to England.
As experts in business, FSB offers members a wide range of vital business services, including advice, financial expertise, support and a powerful voice in Government. Its aim is to help smaller businesses achieve their ambitions. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy.
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