Small firms call for a Brexit-ready Autumn Budget

Press Releases 16 Oct 2017

FSB outlines its Autumn Budget Brexit asks

The Federation of Small Businesses (FSB) is urging the Chancellor to commit to matching EU funding allocations post-Brexit while protecting investment reliefs at his Autumn Budget next month. 

FSB is seeking reassurance that no nation or region will lose out after 2019 as a result of the Government’s proposed UK Shared Prosperity Fund (UKSPF).

Its Budget submission calls on the Chancellor to rule out any new business tax increases and maintain investment incentives, including Entrepreneurs’ Relief, the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS).

Mike Cherry, FSB National Chairman, said: “With the Brexit clock ticking, other nations are trying to tempt our businesses to their shores. The Budget marks an opportunity to position the UK as the best place in the world to invest in innovative firms.  

“We lag behind the EU when it comes to producing serial entrepreneurs. If we want to catch-up, and enhance our international competiveness post-Brexit, we need to see investor incentives protected. Doing so will inject some much-needed stability into a climate dogged by delayed decision-making because of persistent uncertainty.     

If the Chancellor is serious about tackling the staggering disparity in productivity between different areas of the UK, he should replace EU funding according to existing allocations. No region or nation should lose out as a result of Brexit.”    

With local Growth Hub funding coming to an end in 2018, and no extension to the Local Growth Fund for England planned beyond 2021, small firms are calling for continued support for Local Enterprise Partnerships (LEPs) and Growth Hubs.

They are equally highlighting the threat posed by loss of access to the European Investment Fund (EIF). The fund committed around €2.8 billion to the UK between 2011 and 2015.  

Small businesses that trade overseas are still bullish about trading prospects. FSB recommends exporting vouchers as a means to maintaining this international momentum post-Brexit.

Mike Cherry added: “We’re staring into a funding black hole from 2021. LEPs and Growth Hubs, which provide vital support to small firms all over England, need reassurances about the future. Continuation of their work will be integral to boosting productivity as part of an ambitious industrial strategy after we leave the EU.  

“Then there’s the EIF to consider. The fund has proven a vital lifeline for firms struggling to access finance, particularly outside of London and the South East where private investors are less active. The Chancellor must avoid a cherry-picking approach to replacing this growth funding. Doing so threatens to entrench regional access to finance disparities. We need to see small firms supported at all stages of their expansion alongside increased diversification of finance markets.    

“One in five small businesses currently exports. With the right support, we could double that figure. Export vouchers would give aspiring exporters the freedom to invest in the resources they need to start selling overseas, particularly in harder to reach non-EU markets. We can’t rely on a weak pound to boost exports forever – we need to encourage more small businesses to look beyond our sluggish domestic market.”

1) The Conservative Party, Forward Together p 35, 18 May 2017
2) FSB, Reformed Business Funding: what small firms want from Brexit, 10 May 2017, Keep Trade Easy: what small firms want from Brexit, 21 March 2017
3) A net balance of 19.5% of small businesses highlight an increase in exports in Q3 2017, substantially higher than the 11.7% recorded a year ago. Exports are expected to continue rising, with a net balance of 20.5% of small businesses predicting growth in export values in the final quarter of 2017. FSB, Voice of Small Business Index Q3 2017, 19 September 201