Budget comes at a critical juncture for Welsh firms

Press Releases 3 Mar 2021

UK Government announces budget for the coming year

Commenting on the budget, Ben Francis, FSB Wales Policy Chair, said:

“Today’s budget marks an important moment in our national economic recovery from Coronavirus in Wales. Without the right action being undertaken by UK Government and Welsh Government, our economic recovery could be under threat.

“Thousands of small businesses are on the brink of collapse and thousands more are suffering from low confidence as cash reserves dwindle. They will welcome both the extension of flagship support schemes that have kept them going over the hardest year they have ever faced, as well as confirmation of new support measures.

On business rates

FSB Wales has campaigned on the issue of business rates for those most affected by the pandemic, and wrote to The Minister for Economy, Transport and North Wales earlier this year calling for Welsh Government to extend 100% business rates relief for retail, hospitality and leisure firms. This remains our ask of Welsh Government. Business rates and how they are handled in the coming months will play a fundamental role in how businesses are able to recover and reopen successfully, and it is our belief that a longer period of support is needed.

On the furlough scheme

An extension to the furlough scheme will be critical in shoring up those businesses that are currently unable to trade, and will create more opportunities for staff to be brought back to work when the time is right. Furthermore, extending this scheme until September means that firms can use the furlough scheme flexibly as restrictions begin to ease.

On increased support for the self-employed

Ensuring the newly self-employed can now access support marks a big step forward – we’re pleased to see that FSB’s campaign has been heard – but directors, who appear to have been left out yet again, will be incredibly disappointed.

There is still time to fix this entirely solvable gap in the business support landscape and we hope policymakers will take forward the proposals we’ve drawn up with experts in this field. Individuals have now faced an entire year of stress and uncertainty because of the lack of support available, and we would urge UK Government to consider how to support these businesses.

Employment incentives

The next stage of recovery is about ensuring that businesses can grow out of the pandemic and ensuring that the costs of employment are not a barrier to businesses will be a key part of this.

For us to ensure that we can support businesses to grow recruitment will be critical. We welcome Welsh Government’s announcement last week on a new apprenticeships scheme and hope that the next Welsh Government will use any consequential funding in order to expand this programme further and we look forward to the detail of that scheme as a priority.

On interventions for Wales

Investment in the city and region growth deals for Wales, Hydrogen Hub for Holyhead and investment in rail infrastructure are all schemes which will be warmly welcomed. On the city and region deals; whilst new action to move these schemes forwards is welcome and will help push them forward to realisation, much more needs to be done to articulate the value of these to SMEs in the respective regions. This is work that FSB will continue to engage with and support.

Anglesey has suffered successive blows due to the Wylfa Newydd power station and issues around Brexit transition continue to cause uncertainty. It is our hope that the Hydrogen Hub will help provide new opportunities for the Island and beyond and place it on the map of a low carbon Wales.

The announcement of investment in the Global Centre for Rail Excellence was again very welcome and it will be important that there is a plan for how SMEs can be fully integrated in the supply chains for this so that communities in Wales really feel that value of the investment.

On UK Government’s Restart Grant

Welsh Government needs to have some sort of restart package as businesses emerge from closure and face a myriad of upfront costs associated with reopening before they have begun to earn money.

The principle of a restart grant is something that FSB Wales called for when businesses were reopening in the summer of 2020 and it remains an area of concern. We call on Welsh Government to use any consequential funding from this scheme to put forward a package for businesses urgently so that businesses are able to plan for what reopening means to them and to hit-the-ground-running when that moment comes.

The Recovery Loan scheme will also be an important part of this and we welcome UK Government’s efforts to ensure that there is flexibility in the finance options that are available to firms.

Super deduction

The new super deduction option sounds very promising, and we look forward to further detail on the investments it will cover – it should be made accessible to the smallest firms. It is our hope that this initiative supports those businesses who have an ambition to grow and likewise grow Wales stock of ‘missing middle’ firms – an issue which FSB Wales has been leading for some years now.

Barnett consequential funding

Welsh Government needs to think about how to use the £740 million for Wales in order to restart our economy. Smaller businesses will want to see measures in Wales which are aspirational and accommodating of the recovery of those firms and the communities in which they’re located. Re-growing the economy can only happen if our SMEs are in a healthy and profitable state.

On VAT

The continuation of the VAT cut will be critical for those businesses that have been worst hit by the pandemic.

SME training

The Help to Grow training for businesses, particularly on enhancing management and digital skills, is something that is very welcome and should be available to the smallest firms. This was a gap that FSB Wales anticipated when firms were reopening in summer 2020 and we are pleased to see that there will be options available for business owners and their teams to upskill and meet the demands of a post-Covid economy.

“This budget has come at a critical juncture for Welsh firms; if we can get the support package and process of reopening right in the coming months then SMEs will be equipped to play a vital role in our recovery and our economy’s ability to grow out of the crisis.

“Many businesses are starting to see the light at the end of the tunnel and this is very welcome. However, firms need UK and Welsh Government to provide them with a final push over the line in order to provide them with the conditions that will enable them to thrive and help rebuild the Welsh economy. We will continue to work closely with all across our governments to ensure that can happen’.

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Amy Bainton

Amy Bainton

Head of Communications