|AUTUMN STATEMENT MUST BACK SMALL FIRMS
November 28 2012.
Autumn Statement must put UK small businesses at the heart of reforms, says the FSB
FSB calling for:
- Increased competition in the banking sector to provide finance to small firms by setting out plans for a Small Business Bank
- Reform of the labour market and an extension to the National Insurance Contributions Holiday scheme
- A simplified tax system and the planned 3p fuel duty rise scrapped
The Federation of Small Businesses (FSB) is urging the Chancellor to use his Autumn Statement to put a firm plan in place for small firms to grow, which can be fully delivered at Budget 2013.
The FSB has long called for more competition in the banking sector as small firms continue to struggle to access finance. The Chancellor should provide more details of the Business Bank, including a clear road map for its creation, and how this will increase competition in the small business finance market. The FSB believes this could be the stepping stone to creating a Small Business Administration (SBA), similar to that in operation in the USA since 1953.
Putting an authority like the SBA in place, which is dedicated to promoting and protecting the needs of small businesses, will help to instil the stability and consistency which has been lacking in policy delivery.
To instil confidence, the FSB also wants the planned 3p per litre fuel duty increase due in the New Year to be scrapped. This will help relieve the pressure on tight finances of both businesses and households, especially as utility prices have increased.
In addition the FSB is also calling for:
- The regional National Insurance Contributions (NICs) holiday extended to all micro businesses across the whole of the UK. With around nine in 10 small firms responsible for taking on the long term unemployed over the last 15 years, this would help embed recent good news on growth and the reduction in unemployment. FSB research shows that extending the scheme would create around 45,000 jobs and add £1.3 billion to GDP.
- Government to press ahead with simplifying the tax system for millions of small businesses by allowing those that have a turnover of less than £77,000 to move to cash-based accounting.
- Government to develop tax impact assessments using the same principles as other Government department regulation - independent scrutiny, transparency and simplicity - as research shows that nearly 50 per cent of small firms say tax administration is the biggest area of compliance.
- An Internet Service Provider to have a universal service obligation to provide broadband across the whole of the country. This will help to get much-needed broadband access into rural areas that current commercial providers don't believe are profitable, enabling businesses in those areas to grow.
John Walker, National Chairman, Federation of Small Businesses, said: "This is a very important statement from the Chancellor. At the half-way point of the Parliament, the government will be judged on its actions. There is no argument that they've had a tough economic backdrop to work with, but small firms are still feeling the pressure, so need a clear plan for growth to get them back on track is needed.
"Small business policymaking has been subject to a range of confusing patchwork approaches that have often had minimal impact on the ground. We want to see a clear plan of action from the Chancellor which he can take forward to Budget 2013, which will detail the long-term support small firms need. Key to this is going to be the small business bank and eventually how it can become the Small Business Administration supporting small businesses over the long-term."