SMEs urge Chancellor to bring economy out of slump

With the upcoming Spring Budget, SMEs believe jobs, pay and prospects are all at risk unless the Chancellor puts measures in place.

The Federation of Small Businesses (FSB) is warning that personal tax cuts will be ‘meaningless’ unless Chancellor Jeremy Hunt also announces ways in which to bring the economy out of its slump.

FSB National Chair Martin McTague, explained, “Our economy is stuck in a rut and in this Spring Budget, we need measures to move beyond that. Any personal tax cuts will need to be backed by measures to help small firms sustain jobs and hours and to grow.

“This Budget should be about balancing the scales – raising living standards for those who need it the most and securing a strong, economic future in the wake of a turbulent economic climate.

“Employment costs have increased and without a rise in the Employment Allowance, jobs and hours will be at risk, with small firms forced to make tough decisions about the future of their workforce.”

Martin added, “Adjusting the allowance to align with the National Living Wage (NLW) will also allow business owners to focus on expansion, something that will do wonders for the economy.

“VAT remains a giant headache, and the current threshold stifles firms who want to grow but instead, purposely teeter below it to avoid extra costs. Some are forced to close when they hit £85,000 because it’s simply not worth their while to stay open. Simply raising the threshold from £85,000 to £100,000 could unshackle the potential of business growth across the economy. Incentivising entrepreneurs to grow their business in this climate should be top priority.

“Action on the Employment Allowance and VAT are key but there are other measures that would have a significant positive impact – expanding the Business Energy Advice Pilot to a national scheme, introducing tax-free shopping, and extending the Recovery Loan Scheme could also have untold benefits on our economy.”

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