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11 September 2012

Small firms vital to tackling unemployment

Reference number: PR 2012 27

FSB News Release
PR 2012 27

Issue date: Tuesday 11 September 2012
Small firms vital to tackling unemployment
With unemployment expected to remain unchanged at eight per cent, new findings from the Federation of Small Businesses (FSB) show just how vital small firms are to the recovery, as almost nine in 10 (88%) unemployed people that find jobs in the private sector either start up or work for an SME. 
Data tracked since the onset of the recession in 2008 shows that 88 per cent found work in a small business: a quarter (24%) worked in a micro businesses, 27 per cent with a small firm and 17 per cent started their own business.

Although there have been signs of a marked improvement in the labour market in recent months, levels of joblessness are still stubbornly high. FSB''s new research demonstrates that small firms are vital to reducing this number and need to be supported.

As a result, the FSB is calling for the Government to urgently review its current National Insurance Contributions holiday to allow more small firms to take on staff. The organisation believes that by allowing more small businesses to take advantage of the scheme, more jobs could be created. Crucially, these could be full time jobs at a time when many people are taking on part-time work.  
The New Enterprise Allowance also needs to be available from day one of a person claiming Jobseekers Allowance, and should be in line with the national minimum wage. This would help to encourage more people to start a business and if the funding was available for a full year, mean the business had more chance of survival.
John Walker, National Chairman, Federation of Small Businesses, said:
"The numbers speak for themselves – small firms are responsible for creating the majority of jobs and are more likely to take on people out of work, including those that have been out of work for some time.
"In the current economic climate, with costs increasing and cash-flow tight, small firms need all the help they can get. Giving people the ability to start their own business and small firms the incentive to take on staff through extending the National Insurance Contributions holiday will help to boost economic confidence and growth, which is vital."


Notes to editors
1. The FSB is the UK''s leading business organisation with around 200,000 members. It exists to protect and promote the interests of the UK''s Real-Life Entrepreneurs who run their own business. More information is available at
2. The FSB commissioned the Westminster Business School to produce a report looking at employment trends over a 15 year period. This tracked the Labour Force Statistics during the period to see where the unemployed and inactive find work.
3. A micro business has fewer than 10 employees, a small business between 11 and 49.
4. The FSB''s report Back to work: the role of small businesses in employment and enterprise will be released on 20 September ahead of the Lib Dem conference.
5. New Enterprise Allowance is currently only available for those claiming Jobseekers Allowance for six months.
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