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14 November 2017

Small firms call for help with rising costs at the Budget

Responding to the announcement that the Consumer Prices Index (CPI) remained at 3% for October and the Retail Prices Index (RPI) rose to 4%, Mike Cherry, Federation of Small Businesses (FSB) National Chairman, said:

“The Chancellor needs to show his support for the UK’s small firms next week as they battle rising costs and flagging consumer demand. Bringing forward the switch from RPI to CPI-indexation for business rates, ruling out a reduction of the VAT threshold and resisting the extension of IR35 public sector legislation would go some way to helping small firms and the self-employed keep their heads above water.

“This month’s interest rate rise is yet to dent inflationary pressure. The Bank of England needs to think very carefully before its next increase, however. Reaching for further rate rises too quickly risks an out of the frying pan into the fire scenario: inflation comes down but firms become even more reluctant to seek finance for growth, hampering their long term output.  

“Confidence among small retailers has been in negative territory for the past six months. As we approach the festive season, these businesses, which are at the very heart of our high streets, need lifelines. What they certainly don’t need is new tax grabs and loss of entrepreneurial reliefs.”