Autumn statement should include robust support for small businesses
With rising interest rates, high energy prices and recent news that there has been a spike in UK firms going bust, small business owners will be waiting with bated breath to hear what support they will receive from the chancellor in his Autumn Statement on November 22.
Alan Thomas, UK CEO at Simply Business, one of the UK’s largest providers of small business insurance comments on the upcoming Autumn Statement: The UK’s small businesses are some of the most enterprising within the private sector, and their success is essential to economic growth - something which the prime minister identified as a top priority at the start of the year. However, our SME Insights Report found that a quarter of small business owners fear they may be forced to cease trading if the outlook for their business does not improve.
As the Autumn Statement approaches, we are seeing the sector contract in real time, and it is clear that the Chancellor needs to act decisively.
On behalf of the UK’s small businesses, we are calling on the Chancellor to:
- Increase energy support for small businesses. Over a quarter of SMEs are spending up to 40% more on energy each month compared to last year. Many were forced to renew long-term contracts at the peak of the market, which has pushed their energy expenditure to levels unheard-of. With the rates now stabilising, the chancellor should review the assistance available to non-domestic users, with a clear focus on assisting smaller businesses in covering essential bills.
- Extend business rates relief. The 75% rate relief for the retail, hospitality and leisure sectors should be extended beyond the March 2024 cut-off. Well over half of the UK’s small businesses say that rising taxes and inflation are eating into profit margins, which means that thousands are holding off on new hires and expansion plans. Interest rates remain stubbornly high, making access to finance near impossible. As a result, businesses with potential cannot expand or hire more people, further contributing to a sluggish economy.
- Ensure that businesses recoup the £32 billion owed in late payments. Our research revealed that a quarter of small businesses are considering resorting to borrowing money from family and friends, and/or using personal savings to prop up their business - all whilst they are owed an eye-watering sum in unpaid bills. The government itself has said that paying small businesses on time could boost the economy by £2.5 billion annually, but many SMEs believe that new measures, which include providing ‘greater’ advice on late payments and allowing the Small Business Commissioner to additional publish reports, do not go far enough.
Thousands of small businesses are being held back - not because of apathy or lack of ambition, but because of a set of circumstances which are stretching them to the limit. Nonetheless, in a show of determination which is so characteristic of this sector, our research found that three-quarters of SMEs remain confident about the prospects for their businesses.
At this point, in order to help small businesses realise their ambition, the government should build them directly into its economic growth strategy, therefore ensuring a positive forecast for the sector.