Recession Reality Prompts Small Businesses To Call For Pro-Growth Budget – CLH News: Caterer, Licensee and Hotelier News
The bleak economic landscape has cast a shadow over the optimism of small businesses across sectors, with the hospitality industry bearing the brunt of economic hardships. The Federation of Small Business (FSB) has raised concerns, revealing a prolonged period of pessimism among small firms. With confidence dipping into negative territory for seven consecutive quarters, the challenges of the energy price crisis and its cascading effects on operational costs have taken center stage.
Martin McTague, National Chair of the Federation of Small Businesses, sheds light on the distressing situation, stating, “Our research found that confidence among small firms has been in negative territory for seven straight quarters, due to the energy price crisis and the knock-on impact on the cost of doing business.”
He pointed out the stark contrast in confidence levels across different sectors, with the hospitality industry experiencing the most significant downturn. This disparity highlights the uneven distribution of economic hardship, with some industries facing more challenges than others.
Small firms are currently navigating a stormy economic climate characterized by soaring interest rates, skyrocketing energy costs, and dwindling consumer demand. A concerning revelation from the FSB’s research is that during the last quarter of the previous year, around 40% of small firms reported a decrease in revenue. In contrast, only a third experienced an increase, significantly tarnishing the luster of what is traditionally known as the ‘golden quarter’ for business profitability.
The current bleak economic conditions call for proactive measures to encourage growth and revitalize small businesses. McTague emphasizes the need for the government to create a conducive environment that supports small business expansion. He proposes a comprehensive growth plan for small businesses to be included in the forthcoming Budget.
The proposed plan includes several key measures aimed at fostering small business growth: uprating the Employment Allowance in line with increases in the National Living Wage, raising the VAT threshold from £85,000 to at least £100,000, reintroducing tax-free shopping for overseas visitors, ensuring the continuity of the Recovery Loan Scheme to support start-up and scale-up endeavors, and launching a national Business Energy Advice Service to tackle the burden of surging energy costs.
By implementing these initiatives, the FSB believes small businesses will be provided with the necessary support and incentives to overcome current challenges and drive economic recovery. McTague concludes, “Small firms have the drive and the potential to get the economy back up and running, and to put this period of economic decline firmly behind us.”
