George Osbourne urged to offer stability for five million businesses.
The Federation of Small Businesses (FSB) has urged George Osborne to provide the economic stability that will give small organisations the confidence to grow when he delivers his Budget on March 23rd.
Launching its growth manifesto at a speed briefing in Westminster, the FSB told MPs that decisive action was needed to improve the growth prospects of small firms to avoid a jobless recovery. Next month’s Budget will have a direct impact on the UK’s five million small businesses, including the thousands that operate within the jewellery and watch industry.
The FSB argues that small firms are best placed to grow the economy and pick up the slack that will be left as the public sector cuts take their full effect, but they need a stable economic background in which to do this.
“The Budget must provide economic stability and look to ways to nurture entrepreneurship and allow small firms to grow in order to create employment opportunities,” said John Walker, national chairman of the Federation of Small Businesses.
“With the downgrading of GDP in Q4 2010, it is clear that the economy is in a precarious position and small firms that lack confidence in the business environment will find growth risky.”
The FSB is calling on the Government to take a series of steps to stimulate small business growth, including extending the National Insurance holiday for one year to existing businesses with less than four members of staff that take on up to three additional employees.
It reckons that each employee would contribute an additional £6,000 to the Treasury per year through employee national insurance and income tax.
It also wants the government to reverse plans to increase fuel duty from 1st April 2011 and introduce a fuel duty stabiliser to help to control inflation, especially as troubles in the Middle East threaten to increase oil prices further.
More than 60% of businesses are unable to absorb the cost of the increases and one in 10 firms has said they would lay off staff as a result of the costs, according to the FSB.
Other measures that the FSB is requesting for include the provision of finance to help micro-businesses take on apprentices, an extension of the soon-to-finish Graduate Internship Scheme, and the declaration of a moratorium on all new employment legislation for the 12 months following the Budget, to help create a more predictable regulatory environment to enable small firms to take on staff.