Member Article

Autumn Statement the opportunity to build on growing economic optimism, says FSB

In its submission ahead of the Autumn Statement the Federation of Small Businesses (FSB) has called on the Chancellor to take action on energy and business rates and to press forward with tax simplification to help further strengthen economic recovery.

Set against a backdrop of increased economic confidence, the FSB has welcomed Government’s recent moves to support small businesses, notably the Employers’ Allowance. The FSB believes the key now is for the momentum for pro-enterprise policies to be maintained to encourage growth and job creation. In addition, Government must continue to focus its efforts on the long term unemployed, especially those young people who struggle to find work.

FSB research suggests business rates is an area which needs addressing as a priority. They are a significant cost for small firms and unrelated to their economic activity, with some paying more in business rates than in rent. More than a quarter of a million firms rely on 100 per cent rate relief to survive, but relief at this rate is due to expire next year. The impact of this would be equivalent to introducing a new tax on 293,000 small and micro businesses just as the economy is starting to recover.

With rates bills set to increase by 3.2 per cent in 2014 – as set by September’s RPI inflation figure – the FSB wants to see the temporary doubling of small business rates relief made permanent, and a freeze in rates for firms in properties below £18,000.

Furthermore, the FSB has also put forward proposals to address the treatment of firms with multiple properties, which discourage business growth, and has called for urgent action to reform business rates appeals procedures.

It’s not just business rates that add a strain on small businesses. Utilities bills are one of the main causes of rising business costs. These are set to rise further as energy companies have announced above inflation price increases. To help offset these harmful effects, the FSB has called for reforms to make it far easier for the smallest of businesses to get a competitive energy deal.

Unlike household tariffs, business energy prices are not published so small firms have to get quotes from each supplier in order to get a good deal. The FSB is calling for the energy companies to publish tariffs which are meaningfully comparable from one supplier to the next as a much needed first step to introducing transparency to the murky SME retail energy market.

Ted Salmon, North East Regional Chairman, Federation of Small Businesses, said:

“For the first time in many years we were able to write to the Chancellor with our proposals for the Autumn Statement against an encouraging economic background. As the economy strengthens, we are only too conscious of the urgency to implement reforms in areas such as business rates, energy and banking. The Government must also continue to build on initiatives to get the UK’s one million young people into work. So while we have welcomed the Government’s pro-enterprise measures and efforts to address barriers to small firms’ growth, longstanding issues remain in key areas of the economy.

“Energy and business rates are an increasing cost burden for firms up and down the country and are two areas we have highlighted to the Chancellor as needing particular attention. We therefore want to see recognition from him that Government understands the huge impact these issues have on businesses. Clear proposals and timetables for reforms in both of these areas will lock in the confidence we have begun to see building among small firms.”

This was posted in Bdaily's Members' News section by Simon Hanson .