Federation of Small Businesses welcomes Budget

The Federation of Small Businesses (FSB) welcomed the measures but said there was still a missing link after George Osborne presented his Budget to Parliament yesterday (Wednesday March 21). Ann Swain, local branch chairman for the FSB, said: “We asked for a Budget with long-term measures to help to instil confidence, rather than a barrage of micro-measures that have a limited impact on the ground. We are pleased with some of the actions to cut the burden of red tape, help to get our young workers into employment, and measures to improve access to finance. Especially welcome are the proposals to simplify the tax system for the country’s smallest companies. However, petrol prices remain a major concern for small businesses and we would have liked some further action on reducing the level of fuel duty to help struggling small firms. “The key to nurturing the economy back to full health is by tackling the budget deficit and the FSB continues to support the Government’s debt reduction plan. The FSB welcomes the fiscally neutral budget and is pleased with the OBR’s positive revision to growth forecasts this year, along with forecasts for falling inflation. “But, to ensure that businesses can be properly supported and to bring together the measures that have been announced, we are disappointed that there were no plans to look into setting up a Small Business Administration - a department to champion small firms at the heart of Government with a cabinet level minister. This is the missing link to ensuring that all initiatives have the maximum impact for small firms.” On tax simplification: “Plans to move to a simpler ‘cash accounts’ system will bring huge deregulatory benefits to small businesses, and is something the FSB has long been calling for. Many small firms will already use a ‘cash accounting’ system and so the moves to allow businesses with a turnover of less than £77,000 to use this system will be welcome. Research by the FSB for the Office of Tax Simplification found that on average 50 per cent of small firms spend between two and eight hours understanding, calculating and completing tax returns. This system will make it easier for those businesses. What we need to see now is HMRC develop a better relationship with business to ensure tax compliance.” Fuel duty: “We are disappointed that the Chancellor has not announced a cut in the level of fuel duty and that the rise deferred to August is still to go ahead. This will still hit small businesses and households hard and so we need to see a long term solution to address high and volatile fuel prices. We remain concerned that the Government’s Fair Fuel Stabiliser will not trigger an actual reduction in the price paid at the pumps.” On non-bank finance: “With two in five small businesses still struggling to access finance through the banks it is vital for growth that there are alternatives they can go to. So the £1.1 billion Business Finance Partnership is welcome as it will open up non-bank lending for businesses. The further extension to the Enterprise Finance Guarantee will also be beneficial to small firms and the expansion of UK Export Finance will benefit businesses that want to export. “Further to the publication of the Breedon report into alternative sources of finance last week, we hope that the Government will accept its recommendations into non-bank lending. Notably that it will look to put all its financial products under one umbrella organisation. This is a good first step to creating the Small Business Administration that we have been calling for. Enterprise loans: “The announcement that the Chancellor will look at introducing Enterprise Loans for young people to start their own businesses is very welcome. More than three-quarters of 11-18 year olds would like to set up their own business so loans to help them do so will be a great help. The FSB has long said that Government should prioritise and support enterprise to young people in education so that they that setting up on their own is an option.” Broadband: “The raised aspirations for broadband development to make 10 cities in Britain super connected are welcome, but we must not forget about rural Britain where a lot of small businesses are based. Digital services in some parts of rural Britain are still wholly inadequate, and that is where efforts should be focused to avoid a digital divide.” Infrastructure: “We are pleased with the Government’s renewed focus on the UK’s road network. The poor state of roads costs small businesses £5,000 a year due to congestion and poor maintenance. However, it must be remembered that putting a cost on roads is yet another overhead for small firms, which could be damaging at a time when the price of fuel is having a negative effect on businesses. “It is important that any money collected through tolls is used solely to fund the road infrastructure network. Many would argue that the water crisis in the south and the impending energy crisis show the limitations of the private sector in achieving a long term vision. We do not want to see this repeated on Britain’s road network that is so vital to small businesses.”