Member Article

Budget 2016: Confidence of UK's small firms at lowest level in three years

A new survey of the UK’s small enterprises by the Federation of Small Businesses (FSB) has underlined the gloomy outlook of many of the nation’s small firms.

The latest FSB Small Business Index, which has surveyed sentiment from the first quarter of the year, has saw a marked decline in confidence across the country, meaning confidence levels are at their lowest point since Q1 of 2013.

The findings outline how a cocktail of economic uncertainty and looming developments at home, such as the introduction of the National Living Wage (NLW) and pensions auto-enrollment, are fuelling unease from SME business leaders.

Even more damning were the report’s findings that job creation, revenue growth and exports had all fallen in the first quarter, emphasising the tricky economic circumstances small and medium enterprises are facing at the moment.

While data was collected before Wednesday’s Budget, which saw the Chancellor introduce a raft of positive reforms for small businesses, policymakers will still be troubled by the figures which will need more than just business rates reforms to turn around sentiment.

Commenting on today’s report, Sandra Dexter, FSB Vice-Chairman, welcomed George Osborne’s attempts to support small businesses and lessen their tax burdens.

She said: “Small business confidence has clearly faltered, which is why the welcome small business focus in the Budget is so important.

“We need a renewed push for growth and productivity – with policy makers delivering a sustained package of support for ambitious small firms.

“The Budget included a number of important measures to help smaller businesses, particularly changes to business rates which will see many small businesses taken out of paying rates altogether.”

However, Baxter believes more needs to be done to cut red tape and that an overhaul of the tax system is badly needed in order to build on the positive moves made by the Chancellor on Wednesday.

She added: “Delivering on tax simplification measures will be vital - as will be pressing ahead with new investment in much needed infrastructure. Taken together these measures should help to boost confidence and help small firms to grow and succeed.”

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