FSB News Release

PR/2009/31

Issue date: Tuesday 28 April 2009

Budget has been bad for small business, FSB poll reveals

Most small businesses will be negatively affected by increases in fuel and alcohol duty announced in last week's Budget, a survey by the Federation of Small Businesses has revealed.

The poll of more than 300 firms showed that entrepreneurs heavily criticised the Chancellor's Budget.  Nearly 80 per cent of small businesses estimated that the 2p rise in fuel duty would adversely impact their business and 71 per cent estimated it would cost them up to £30 extra a week. Almost a third said the 2p increase in alcohol duty would have a negative consequence - at a time when five pubs are closing each day.

Almost 70 per cent of small businesses said the Budget had not supported small businesses and over a third (38 per cent) said it would ‘quite negatively' affect their business.

There was some good news. Over a quarter (29 per cent) of business owners welcomed investment in building projects and also welcomed the extension of the scheme for loss making companies to reclaim tax on profits.

John Walker, National Policy Chairman, Federation of Small Businesses, said:

"Small businesses are the engine room of the British economy, but they have been choked by the Budget with increases in fuel and alcohol duty incurring extra costs and little to help small firms struggling with cashflow.

"This survey shows that the Chancellor's Budget  could have gone much further to support small firms and we will be meeting with officials to ensure they do more to help small firms create and retain jobs and can survive and grow in these difficult times."

ENDS

Notes to Editors

1. The FSB is the UK's leading business organisation with over 213,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk.

2. 321 members were polled between April 24th to 25th 2009.

Do you feel this was a budget to support small businesses?
Yes   3%
No    68%
N/A   29%

After yesterday's budget how do you feel about the UK economy?
Very negative 44%
Quite negative 37%
Neutral  16%
Quite Positive 3%
Very Positive  0
 
How do you feel the budget will affect your business?
Very negatively 23%
Quite negatively 38%
Neutral  32%
Quite Positively 5%
Very Positively 2%

Will any of the following impact on your business?

Increase in Fuel duty
Yes – Positively   15%
Yes – Negatively  79%
No impact   15%

Increase in alcohol duty
Yes – Positively   7%
Yes – Negatively  28%
No impact   65%

Investment in building projects
Yes – Positively   29%
Yes – Negatively  9%
No impact   62%

Extension of carry back of loss relief allowing businesses to claim back tax from previous years against losses in 2009
Yes – Positively   48%  
Yes – Negatively  1%
No impact   51%

What do you estimate the added 2p a litre on fuel will cost your business per week?
 £0     5%
£1-10    25%
£11-£20    31% 
£21-£30   15%
£31-£40   6%  
£41-£50   4%
More than £50  14%

The 15% VAT will remain in place until 1st January 2010.  After January 2010 should the VAT rate
Go below 15%    17%
Stay the same at 15%   37%
Go back up to 17.5%   22%
Go above 17.5%   6%

Should the Government create a targeted flat 5 per cent VAT rate on labour-intensive industries?  16%

Tax breaks on capital investment over £50,000
Yes – Positively   25%
Yes – Negatively  5%
No impact   70%

Contacts:
 
Stephen Alambritis: 020 7592 8112/07788 422155               
Prue Watson: 020 7592 8121/07825 125695               
Marc Shoffman: 020 7592 8113/07595 067068
Sophie Kummer: 020 7592 8128/07917 628998       
       
        
For regional FSB contacts please go to www.fsb.org.uk/regions