Pro-small business Budget ‘first and best’ chance for Chancellor to secure sustainable growth

Pro-small business Budget ‘first and best’ chance for Chancellor to secure sustainable growth.

The Federation of Small Businesses (FSB) is calling on the Chancellor to deliver a decisively pro-small business Budget, saying SMEs are “sick of stagnation.”

The UK’s largest small business group says the Budget, on 30 October, will be the Chancellor’s “first and best chance” to secure sustainable, long-term economic growth.

It calls for specific measures to ease employment costs, remove barriers to access finance for investment, and lift more small firms out of the burden of business rates.

FSB is also urging the Chancellor to resist pressure to introduce anti-enterprise tax rises, as new official figures highlight the urgent need to encourage more start-ups as well as support existing small firms.

The figures – from the Office for National Statistics (ONS) - revealed a 56,000 drop in the number of small businesses in the UK between early 2023 and early 2024. They also showed a 0.5 per cent fall in the number of people employed in small businesses, from 16.7 million to 16.6 million.

FSB is calling on the Chancellor to:

Provide certainty and a pro-business, pro-employment element to the plan to Make Work Pay, specifically increasing the Employment Allowance so it automatically rises in line with the National Living Wage (NLW) and re-introducing a Statutory Sick Pay small employer rebate.
Take decisive action to give small businesses confidence to invest by increasing protection for those who put their houses on the line to grow their business, by stopping the unscrupulous blanket use of personal guarantees on loans.
Fulfil Labour’s pledge made in the election campaign to help small businesses, including those on or around the high street, with business rates. This includes adopting FSB’s proposal to take more small firms out of the tax by increasing the threshold of Small Business Rates Relief from £12,000 to £25,000 of rateable value.
Tina McKenzie, Policy Chair of the Federation of Small Businesses, said:

“A decisively pro-small business Budget is the first and best chance for the Chancellor to secure sustainable growth by the end of the Parliament.

“Small businesses are sick of stagnation. Rachel Reeves spoke at Labour Party conference about tearing down barriers to opportunities and enterprise, and the upcoming Budget is the time to take decisive action to do so, delivering on her promise to lead the most pro-growth Treasury ever seen.

“For small businesses, the barriers to investment are very personal. To help small businesses invest, employ and grow, we are asking the Chancellor to tackle the barriers that dissuade small businesses from growth.

“Whether that’s the huge personal risks entrepreneurs take – often putting their house on the line – to secure finance; committing tens of thousands of pounds to give someone a job; or signing the contract for new premises knowing that business rates bills will land immediately. It’s by making these decisions easier for small businesses that Rachel Reeves can help small firms generate the growth we need.

“The Chancellor, in her recent party conference address, gave every impression that she would sensibly avoid being lured into damaging anti-enterprise tax rises in the Budget, and we urge her to stick to that.

“Now is the time to help entrepreneurs invest, employ and get growth back to where it should be.”