Doomsday scenario outlined by FSB for small firms if the chancellor fails to support them as the economy crashes

Doomsday scenario outlined by FSB for small firms if the chancellor fails to support them as the economy crashes

By Harry Mottram: The Federation of Small Businesses (FSB) has called on the Chancellor of the Exchequer and Conservative MP for Richmond in Yorkshire to give financial support to small businesses.

Speaking this week on BBC Radio 4’s Today programme the FSB’s Chair Martin McTague said: “We don’t have any problem with the way the chancellor dealt with consumer needs. But there is still a massive problem with small businesses. They are facing something like twice the rate of inflation for their production prices, and it’s a ticking timebomb. They have got literally weeks left before they run out of cash and that will mean hundreds of thousands of businesses, and lots of people losing their jobs.”

McTague said the Office for National Statistics, revealed that two million of the nation’s small firms or up to 40% of businesses have just 12 weeks of cashflow to survive on.

The FSB’s boss said: ““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.”   

The Government’s Office of National Statistics (ONS) shows a steady increase in businesses year on year from 2017 to 2021 when there was a sharp rise in insolvencies. Statistics for this year ae expected to rise further – something ICSM can testify to with the publication of the Runners and Riders section in their regular newsletters.

The FSB’s doomsday scenario came as the Guardian reported that Martin McTague could see half a million small firms going to the wall this summer in what was described as a ‘ticking timebomb’ – unless there was help from the chancellor on fuel prices and energy price rises.

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