Looking ahead to the expected launch of measures to mitigate the impacts of rising prices, Federation of Small Businesses (FSB) Chair Martin McTague said:
“The cost of living crisis starts with a cost of doing business crisis. The prices that small firms pay for inputs are running well ahead of consumer prices – businesses are trying to absorb the difference, but many are being left with no choice but to pass costs on.
“Only by tackling the cost of living crisis at its root – that is, the surging operating costs faced by firms – can the Government bring it to bear.
“In terms of measures policymakers should consider, cutting VAT across the board would stimulate growth and consumer confidence without adding to inflation.
“At the local level, the very smallest firms are now reporting unmanageable energy bills, even before the Autumn rise hits them. Some are planning to close their doors as energy bills are so high as to make their business unviable.
“The energy support issued through the council tax system to households should therefore be matched for micro businesses via the business rates system, alongside discretionary financial support, issued through local authorities, for firms which do not pay business rates.
“The smallest firms are defenceless against many-fold rises in electricity and gas bills, not benefitting from the protection of the consumer price cap, nor the leverage that big corporates can harness to get the best deals.
“Equally, with fuel prices at record-highs, government should look again at fuel duty rates – for those that have to travel for business, especially in remote areas, the surging price of petrol and diesel is putting livelihoods at risk.
“At the same time, we need to see immediate allocation of unspent covid additional relief funding to firms most in need. It’s frustrating that, after all this time, that money, which could make a real difference, is still just sitting there.”
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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.