Tuesday, July 16, 2024

Chancellor’s Budget: Small Business strivers snubbed at meagre Spring Budget

ANN Scott, Development Manager (Essex) at Federation of Small Businesses, has offered her initial reaction to the Spring Budget:

The Chancellor had set high expectations for supporting small firms during these challenging times, but today’s Budget will leave many feeling short-changed.

The distinct lack of new support in core areas proves that small firms are overlooked and undervalued.  Budgets are about tough choices, and with today’s £billions being allocated to big businesses and households, 5.5million small businesses and the 16 million people who work for them will be wondering why the choice has been made to overlook them.

We’ve got a Budget that helps households with energy costs but not small firms.  On business taxes, it spends £27bn extra on big businesses, arguing that small businesses are already catered for. This will leave to a feeling of being left behind instead of being considered equal partners in economic recovery – trickledown economics here simply does not work.

Proposals to help people with health conditions are ill-designed and won’t help people get back to work, and we fear the work capability assessment changes won’t happen for years. The Chancellor has failed to take any action to make it easier for small firms to recruit people locked out of the labour market. Those with health conditions and disability have been let down by a Government that does nothing to work with small employers and is continuing with its failing Jobcentre-focused approach. Small measures on subsidising occupational health are welcome but not the big bang needed.

Measures on the over 50s are token efforts at best, though we are pleased the Government is committing to the skills bootcamp model.

The principle of what’s announced on childcare is positive – but this Government’s Achilles heel is in delivery and practicalities, so there needs to be more work with providers to make sure it can work. Providers will be worried that funding will not meet the expectations set out. The Government must remember that delivering safe childcare is not just a matter of social justice, but a matter of economic imperative. The key test for providers will be whether the funding still allows them to cover their costs – while balancing the books at the same time.

The fuel duty freeze is a result of FSB’s campaigning and the springboard small firms need to help navigate the difficult roads ahead. This will save them money and provide some breathing space, allowing them to focus on growth.

However, some of today’s smaller measures will benefit the economy. The increase in draught relief will go a long way to helping the Great British Pub.  The enhanced R&D tax credit is a significant step towards promoting innovation. However, the large proportion of firms who fall outside of the 40% intensity threshold will be left feeling mystified by the change in policy since last Autumn. R&D tax credits have been the most effective industrial policy of the last ten years, creating cutting edge products and services in the small business community.

While there are some positive words in today’s Budget, the Government’s lack of support for small firms in critical areas is glaring. The Chancellor stressed that the UK is one of the best places to do business and we’ll avoid a technical recession this year – but small businesses need more ambition and more focus. Action is what counts if we are to reverse the 500,000 small businesses lost over the last two years. It’s high time the Government put small firms at the top of the agenda and lend them the necessary support on the path to economic recovery.


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