It’s been a tumultuous couple of years in the UK. Since 2015, the country has seen three different prime ministers in David Cameron, Theresa May and Boris Johnson. These successive leaders have overseen the UK’s impending exit from the European Union, which after much political back-and-forth, is slated for October 31st2019.
Ahead of this date, the Federation of Small Businesses (FSB) has laid out three priorities for new Prime Minister Boris Johnson.
“We need to see a real sense of urgency from this new Prime Minister when it comes to creating a pro-enterprise environment,” said Mike Cherry, the FSB National Chairman.
“As things stand, small business confidence is at rock-bottom; political uncertainty has left us unable to invest, grow and plan for the future.”
The FSB has stressed that “time is of the essence for this new government” to resolve the direction of the country beyond October 31st and to begin focusing on the three most pressing issues facing businesses and industry.
Business rates need urgent reform
The FSB has long campaigned for reform of the business rates system, calling it “expensive, inflexible and unfair” and “out-dated”. The body has also found that business rates amount to one of the highest costs that small businesses must shoulder.
As such, the FSB is calling for reform of the system to reduce the financial burden it places on small businesses. To achieve this, it is calling for the extension of a two-year, 33% discount. So far, this is only available to small retail businesses with a rateable value of up to £51,000.
The FSB wants to see this extended to manufacturers as well as retailers and made permanent rather than being available for only two years. The body also wants to see consistency across the UK, calling on the government to give nurseries 100% rate relief.
Deliver on much-needed infrastructure upgrades
While the private sector is rolling out 5G wireless internet for mobile internet access, the FSB is piling on the pressure to make sure that the government is doing its part to help create a more competitive business environment, too.
The organisation argues that this should come in the form of investment in desperately needed infrastructure upgrades, with a focus on broadband and telephones.
The FSB has made clear that small businesses are missing out on the upload and download speeds they are entitled to under the Universal Service Obligation, an Ofcom initiative which stipulates that all homes and businesses are entitled to a “decent and affordable broadband connection”.
According to a report published by the European Commission, the UK lags behind other EU nations on a range of different measures where internet access is concerned, and as recently as 2018 was ranked 35th in the world for global broadband speeds. This leaves businesses at a competitive disadvantage to international competition.
As such, the FSB is keen to highlight the importance of dealing with this imbalance as quickly as possible to ensure that the UK remains a competitive environment post-Brexit.
Help small businesses with the cost of employment
The FSB has identified spiralling employment costs as one of the other big challenges facing small businesses, particularly in an environment where the value of the pound is sliding.
To help offset these costs, the FSB is calling on the government to deliver financial relief for businesses in four ways:
1. Uprate Employment Allowance
Employment Allowance gives businesses the chance to slash their National Insurance bills by as much as £3,000. The FSB wants to see this figure increased to help businesses save more each year, though the organisation has not yet specified a figure.
2. Deliver a National Insurance holiday
The FSB estimates that 80% of small businesses across the country contribute to their local charities or wider communities in a tangible way.
This includes being more likely to hire employees from marginalised sections of the workforce, including older staff, staff with low levels of educational attainment, and workers with a known disability.
The FSB is calling on the government to deliver a one-year National Insurance Holiday for businesses that employ staff from disadvantaged groups. These allow businesses to claim deductions on their National Insurance Contributions for a set period, allowing businesses to reinvest the savings.
3. Introduce a Statutory Sick Pay rebate
The FSB is also calling for the government to introduce a financial reimbursement scheme for Statutory Sick Pay (SSP), whereby businesses can recoup some of the costs associated with long-term staff absence through sickness.
The body is keen to see the government introduce a reformed version of the old Percentage Threshold Scheme. Currently, businesses are unable to reclaim SSP costs.
4. Increase Apprenticeship Fund to help small businesses
Finally, the FSB wants the government to make it easier for small businesses to hire apprentices by shoring up the Apprenticeship Fund.
According to an FSB report on small businesses and apprenticeships, around 20% of businesses who have employed apprentices have struggled to afford the required training costs. Additionally, the majority (60%) of eligible smaller businesses have not received the available £1000 incentive for hiring 16-18 year olds, while 34% were not aware of this incentive.
As such, the FSB wants to see robust change in this area, making it easier for small businesses to access the initiative while ensuring they do not suffer financially for contributing to the development of the workforce of the future.
With Brexit continuing to dominate the political and media landscapes, it’s important that the interests of industry aren’t left to fall to the wayside. The FSB has made a robust case for change, putting small businesses front and centre.