More small business support needed or we could see backbone of the economy collapse, says FSB Chair

“Small businesses are the backbone of the economy, but unless more support is issued soon, we could see this backbone collapse”, says small business spokesperson responding to the Chancellor’s latest speech.

In a speech delivered online to party members during the Conservatives' annual party conference, the Chancellor RIshi Sunak said he will "always balance the books", despite the increased spending during the coronavirus pandemic to secure jobs.

He continued: "I won't stop trying to find ways to support people and businesses."

Responding to the Chancellor of the Exchequer‘s speech, Federation of Small Businesses (FSB) National Chair Mike Cherry, said: “The Chancellor rightly acknowledged and recognised the important role that small firms have played during this crisis. Small businesses and entrepreneurs are key to adapting and evolving to the changing economic landscape and are crucial to job creation and growth.

“The past nine months have been some of the toughest periods small businesses have ever faced, and this doesn’t look set to end any time soon. One of the most important things is having public health system in place that enable businesses to operate including a fully functioning test and trace system.

 “Various packages of support have been issued since the start of the crisis back in the spring which have undoubtedly saved millions of jobs. As we approach the winter and the prospect of tougher restrictions on the economy, more help is going to be needed to avoid thousands of businesses and jobs going under.

“The Chancellor said he wants to help small businesses to adapt while creating support and extending opportunities, but any further restrictions on trading must have an economic support package attached. It’s vital alongside this that he addresses the large gaps in support, especially to company directors and start-ups.  Looking forward, we need also to be looking at moves to boost job creation, and to help those made redundant to set up their own business.

“Recent measures unveiled to help retrain and educate workers with key skills to help them get onto or back on the working ladder are welcome, but more must be done.

“Much like the flexible furlough brought in over the summer, the most recent announcements relating to the Job Support Scheme will have a role in safeguarding businesses and livelihoods for the next six months. However this will only help those employers with roles that are on the borderline – such as where there is some work for the employee, but not enough. 

“Once the furlough scheme comes to an end on the 30 October, there remain industries, sectors and local areas still closed or facing severe restrictions by government and with no date or prospect of opening – which therefore means no work at all for their employees. The future for the events sector, night-time economy, arts and travel industries looks increasingly bleak, however we are going to need them to survive in order to revive the economy.

“It remains absolutely critical that measures are announced to help those left out by these various packages in particular the newly self-employed and company directors. These individuals have been left with little or no income support for much of the year with little prospect in sight of a rebounding economy in the immediate future, the Government must address this area sooner rather than later.

“And with local lockdowns of varying degrees taking part right across the UK, it is vital that viable small firms impacted by curtailed footfall, curfews and forced closures are given the support they need to reopen again once measures are lifted.

“Looking to the Spring Budget, we hope the Chancellor will make a clear decision to go for growth, rather than removing money from the economy in the hope of a short-term balancing of the books.  We need to see creative ways of helping jobs and small firms while at the same time ensuring ordinary workers and firms aren’t slapped with tax hikes and rising costs which would only further damage the hope of a recovery.

“Small businesses are the backbone of the economy, but unless more support is issued soon, we could see this backbone collapse.”