The Federation of Small Businesses (FSB) has released a Tinsel List of asks in the run up to the festive season to bring a surge of fresh energy to the hospitality and retail sectors this winter.
The latest Small Business Index (SBI) paints a striking picture for consumer-facing hospitality, leisure and retail businesses at the forefront of the ongoing cost-of-living crisis. Small firms in both retail and accommodation and food sectors had far lower confidence readings than businesses from all sectors, at -38 points and -36 points respectively, against an all-sector finding of -14 points in the second quarter of 2023.
With just 119 days to Christmas, the UK’s largest business group say it’s never too early to start planning for the festive season – particularly when it comes to our small business community. For policymakers, the time to act to ensure some festive economic cheer.
FSB’s Tinsel List of asks includes:
- High streets must be easily accessible, with available parking, and increasing park and ride. Local transport must be reliable, affordable and well connected – and the Government must ensure its Pothole Fund is fairly allocated.
- Raising the VAT threshold from £85,000 to £100,000 could spark growth across the economy. Many firms halt trading near the end of the tax year to avoid hitting the current limit and incurring additional costs.
- The Small Business Rates Relief threshold should be increased to £25,000 to remove 200,000 small firms out of the rates system.
- Cheaper energy costs – energy firms should more widely adopt FSB’s proposal to allow small firms that negotiated their contract at the height of the energy crisis last year to be able to ‘blend and extend’ their contracts to take advantage of lower, wholesale prices. Lower energy bills will allow firms to keep their prices low for consumers.
- Reinstate tax free shopping for international visitors, to add £4bn of GDP through increased retail and tourism, secondary spending and small producers – and signalling that the UK is open for business.
FSB National Chair Martin McTague said: “The summer season will soon be drawing to a close and although the festive season might seem like a long way off, now is the time to take steps to help claw some of that confidence back.
“The next big wave of tourists is likely to flock here to spend their hard earned cash on Christmas gifts, explore yuletide markets and savour classic roast dinners – indeed, the UK has always been a popular holiday destination over winter.
“Meanwhile, taking steps to ease the cost of doing business on small firms would in turn ease prices as people across the country start Christmas shopping or planning a work party.
“These small businesses have already dealt with numerous challenges this year, from rising interest rates to high inflation and the extra weight of energy costs, but now is the chance to make a real difference so we can end the year on a high note.”