Small firms call for measures to stem unemployment and support directors as furlough winds down

Press Releases 1 Sep 2020

FSB responds to a further winding down of the Job Retention Scheme.

Responding to further changes to the Job Retention Scheme taking effect today, Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “The Job Retention Scheme has been a huge success, protecting livelihoods and the futures of businesses all over the country. We now have to avoid a scenario where its wind down triggers mass unemployment.  

“Sadly, thousands of jobs have already been lost. This crisis has changed the commercial world for the long-term and future job creation now has to be a priority, particularly for those who are currently out of work.

“The ability to furlough, while vital, does nothing to reduce the costs and risks that come with taking on new personnel. The cost of running a small firm has increased by at least £60,000 since 2011 – an increase largely driven by spiralling employment costs.

“Small firms employ 60% of the private sector workforce. If we want them creating new, future-proofed roles, we have to bring down the upfront costs of hiring. That starts with reducing Employer National Insurance Contributions, which serves as a jobs tax, by cutting rates or increasing the targeted Employment Allowance. As the Job Retention Scheme is brought to an end, NICs should be brought down to protect jobs.

“Swift implementation of, and straightforward access to, the Government’s new apprenticeship, traineeship and Kickstart initiatives is also a must.    

“Equally, many will now be looking to strike out on their own, as was the case following the financial crash, so we need to see expansion of the Start-Up Loans and New Enterprise Allowance programmes.

“As the Job Retention and Self-Employment Income Support Schemes are brought to an end, it’s important to remember that many have not been helped by either. Thousands of company directors – who have contributed corporation and dividend tax for years – have been left with no help whatsoever for over five months, a fate also suffered by the newly self-employed and sole traders earning over £50,000.

“At the very least, we believe it is time for the Government to bring forward a rescue package for those who have been left out. We look forward to a truly pro-business Budget in the months ahead. Now is not the time for measures that will stifle a small business community that will be central to our economic recovery.”    

Ends

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Matt Dickinson

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About FSB

As the UK’s largest business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed.

FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy and on Instagram @fsb_uk.