These figures will be no comfort to small firms and everyone under pressure in the real economy – rising costs, barriers to finance and high business rates are all draining investment and hampering growth.
Our latest Small Business Index (SBI) shows how for the first time since records began, more small firms are bracing for contraction, closure or sale over the next year (27%) than those expecting to grow (25%).
This loss of momentum matters because when small firms pause hiring or shelve investment plans, it directly feeds into the national growth picture. There is an urgent need to tackle the barriers we already know are holding small firms back.
The Government’s Small Business Plan includes a welcome commitment to legislate against late payments, which close 38 businesses every day, and measures to make access to finance easier and more affordable so small firms can invest and grow. Its pledge to cut the regulatory burden by 25 per cent is also encouraging, and small businesses will be looking closely at how this is delivered in practice.
However, it can’t end there. Business rates remain a heavy weight on small firms, and while the Small Business Plan’s commitment to address them is welcome, the Autumn Budget will be the moment to focus support on the smallest businesses and give high streets a fighting chance of recovery.
The Government can help give firms confidence to hire by accepting the House of Lords’ key amendments to the harmful Employment Rights Bill, which adds to the severe pressures we are seeing on jobs and recruitment into work.
The priority now has to be making sure we’re creating a climate where small firms can do what they do best – employ people and grow the economy in every community in the UK.
