Against the backdrop of one of the most turbulent and challenging periods for UK businesses, many looked to last week’s Spring Statement in the hopes that the Government would announce pro-active measures that would help firms grapple with rising costs, National Insurance and tax hikes, skills shortages, soaring energy and fuel prices, and ongoing supply chain disruption, writes Ed Rimmer, the CEO of Time Finance.
Last week saw Rishi Sunak, the Chancellor, rise to his feet in the House of Commons to deliver the Government’s budget. Those immediate measures introduced, including fuel duty cuts, an increase to the National Insurance threshold and the longer-term aim to cut the basic rate of income tax, will go some way to bridge the gap for consumers as bills rise. Whilst they come as welcome measures that give the population some form of relief, they fail to tackle the root of the issue and put in place a long-term solution to re-grow our economy. UK SMEs need to be at the centre of that support.
Small businesses make up 99% of the UK’s wealth, generating new forms of income, creating opportunities for employment and skills development, as well as driving innovation and change. Last week’s Spring Statement needed to see more financial aid directed toward businesses to ensure not only that they have the mechanisms in place to tackle their own ‘cost of doing business’ crisis but they can also meet the increase in wages that their employees so desperately need. Without this, households will continue to face a financial squeeze and the ripple effect this will have across the UK will continue.
Our industry knows too well that when businesses are held back or worse – forced to fold due to lack of financial support – this will only serve to stunt economic growth further. It’s a continuous cycle that will snowball if not addressed quickly. ‘Creating a culture for growth’ is a necessity if we’re going to meet the OBR’s forecasts. Even then, the UK will not experience as large a period of growth as previously predicted, further amplifying the importance of backing British businesses now and putting the right measures in place.
The Government has promised a lot to SMEs, but with much of this yet to be announced in the Autumn Budget, six months is too long to wait for this help to materialise. Reforming tax credits and expanding relief for R&D should really be happening now so that businesses can pick up the pace with innovation. Likewise, businesses need to be able to plan capital investments and with Super Deduction coming to an end next year, they deserve to know if and when measures will be in place to help invest in new technologies.
Businesses will be heavily reliant on support from traditional forms of lending and alternative finance solutions. This is where our industry can really step up to deliver financial aid and headroom where possible. Identifying challenges and seeking opportunities swiftly can mean the difference between success and failure in this climate. The coming months will continue to prove to be difficult, but with the right support available, what may feel like a catastrophe can turn into just a few bumps in the road. We’ll certainly be on hand to champion businesses during this time and encourage the rest of the industry to do so too.”
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