Reference number: PR/2011/42
FSB News Release
PR 2011 42
John Walker, FSB National Chairman''s New Year Message
The past 12 months have been some of the most exciting we have experienced. From the Olympics to the Diamond Jubilee, there has been much to cheer about. These big events showcased the nation, and the businesses that operate in it, in a positive light.
There is no argument that, despite the feel-good-factor, it has been another tough year for small businesses. Small firms have risen to the challenge – many have diversified and tried to grow. The signs are cautiously optimistic as we move into a New Year – after starting 2012 in recession, growth has edged back into positive territory and unemployment has fallen this year.
This year we launched a comprehensive report looking at the very significant role small firms'' play in employment and job creation. It showed overwhelmingly that small firms are more likely to employ of the long-term unemployed and people that might find it difficult to gain employment. Almost nine in 10 people that go back to work in the private sector are employed by a small business – a clear indication of the importance of the 4.8 million small firms in the economy and their role in the recovery.
Our ‘Voice of Small Business'' Index – now entering its fourth year – shows business want to grow and invest in 2013. Confidence is still low, with many concerned about lack of demand and wider economic issues, but our members are heading into 2013 with more confidence than they did going into either 2011 or 2012. This is a move in the right direction and something the Government must build on in the New Year.
Businesses need to be given a firmer footing so they can grow and be confident to take on staff. I am very supportive of the work the Government is doing to reduce the regulatory burden that small firms face. This, if done right, will make it easier for businesses to employ staff or free up the time people need to run their business – time which can then be spent growing the business.
However, the move to make small firms report their payroll in real time – Real Time Information – will place a huge compliance burden on the smallest firms. Indeed, many will have to buy new software to deal with it. But, we know that many firms still don''t know it''s coming in – and it starts in four months time. The New Year must see a big step-up in the communications campaign to make businesses aware of the new rules. We will continue to work with HMRC to make sure this message is communicated to small firms.
We have worked closely with other organisations to represent our members to the banks, the Financial Services Authority and MPs to try to conclude the complex issue of mis-selling financial products. It has been a year of financial scandal with this mis-selling and the manipulation of the inter-bank lending rate.
Too many businesses have failed because of this, but I want 2013 to be the year when a line is drawn under this sorry saga and firms are given the redress they deserve. It has already gone on for too long and until it ends business and banks will not be able to rebuild the broken relationship crucially needed to help bolster the confidence of small firms and the wider economy.
Accessing bank finance has also continued to be an issue. Less than one in 10 firms responding to the fourth quarter ‘Voice of Small Business'' Index said they consider credit to be easily available. Funding for Lending should begin to make credit cheaper in 2013. We will be watching the results closely throughout the year to make sure this money gets through to small firms.
The new business bank must improve competition in the sector and promote alternative sources of finance – especially for businesses to invest, grow and diversify. If past recessions have taught us anything, it is that demand for finance is at its highest as the recovery begins.
The ongoing uncertainty in the eurozone will also have an effect on businesses that want to trade outside the UK. In research that we''ll publish next year, small firms are increasingly targeting countries outside the safety of the EU in which to export. We were pleased with the additional funding boost for exporting that was announced in the Autumn Statement and hope this will help to entice more small firms to export. But, until there is more stability in Europe, small firms could be put off exporting.
While 2013 won''t have the glamour of the Olympics and the Jubilee, I hope that it will be the year in which we turn the corner into recovery. The signs seem to be positive, but it''s going to be a long road ahead with some economists warning of a triple-dip recession, and others cautious optimism. There is little doubt small firms are best placed to help the recovery as long as they have the confidence and ability to invest and grow.