Key stats from the FSB London Small Business Index:
- London small businesses increasing headcount outpaces those decreasing headcount in Q3.
- 57% of small businesses in London said that their growth aspirations in the next 12 months were to grow either rapidly (increase turnover/sales by over 20%) or moderately (up to 20%).
- In London, the general economic conditions (66%), consumer demand (32%), alongside appropriately skilled staff and tax burden (both 22%) are the greatest perceived barriers to growth over the next 12 months.
Confidence amongst London small businesses has returned to a positive level in Q3 2023, performing more strongly than the UK average and with the Chancellor about to deliver his Autumn Statement speech to set the economic agenda for the next year, we must support the small business community through economic recovery and a return to growth.
In Q3, 33% of London small businesses reported an increase in profit, with a 37% reporting a decrease. The net balance figure of -4%2 for Q3 2023 is higher than figures reported in Q2, where net revenue was -9%. Revenue in London in Q3 is on par with the low countrywide average (net -6%).
FSB London are urging the Treasury to address the late payment issue and plainly condemn the pernicious impact it has on small businesses. This can be mirrored by the GLA as we are keen to make London a ‘Prompt Payment Capital’ where all Anchor Institutions lead by example and encourage big businesses to pay their supply chains on time.
It is also important that we extend the SME focused 75 per cent Retail, Hospitality and Leisure Business Rate relief from March 2024 as these sectors have had the hardest time over the last three and a half years.
Finally, skills remain a huge challenge for London businesses and we want to see more small firms in the capital take on Apprentices. Maintaining the current Apprenticeship Levy and resisting calls to turn this into a more generalised skills levy is important. We are keen to see the creation of an Apprenticeship Grant scheme for London employers whereby they receive fiscal support for creating and maintaining Apprenticeship places.
FSB London Policy Chair, Laura Timm, said:
“Small businesses in the capital have seen an uptick in confidence in the last quarter and it is vitally important that we build on this positive sentiment. The Government and Mayor of London must act swiftly to end late payments, extend business rates relief, and eliminate the perverse disincentive against acquiring new skills. With inflation barely budging, the Chancellor has a golden opportunity to spur the economic vitality the UK needs. The future of our economy is at stake, and there's no room for half measures.”