Business leaders are calling on Chancellor Jeremy Hunt to deliver a plan for economic growth ahead of his first Budget.
The Federation of Small Businesses (FSB) has put forward its agenda, which urges the Chancellor to focus on economic growth and business support.
With less than a fortnight until the Budget on 15 March, the FSB hopes that Hunt will deliver a plan to help stabilise the economy while boosting confidence among small businesses nationwide.
In the agenda, the FSB outlined several main priorities for the Government to action:
- delay the decision to slash R&D tax relief for SMEs
- scrap business rates for firms in properties with a rateable value of £25,000 a year
- increase employment allowance in line with the living wage
- increase tax-free childcare and support for over 50s employment
- allow self-employed people to deduct training expenses.
Tina McKenzie, FSB policy chair, says the Chancellor "has to make significant strides" on multiple policy areas to "make people notice and lead to strong growth".
She added:
"There have been very encouraging signs that Jeremy Hunt ‘gets it' - the Budget is make or break to see if he can turn words into action. The Chancellor's Bloomberg speech showed a lot of promise, and you can tell he is a former entrepreneur himself. The fact there are lots of economic challenges means that there is huge opportunity for action."
Businesses face the economy's squeeze
The British Chambers of Commerce (BCC) has come forward with its own suggestions on how the Chancellor can further support businesses.
The BCC's latest quarterly report found that business confidence still sits at a Covid-crisis level.
After reaching out to more than 1,000 businesses, the survey found:
- Two-thirds of businesses (65%) plan to raise prices due to cost pressures.
- Almost half (47%) say paying energy bills will be difficult when the current business support package ends.
- More than half (52%) are consistently experiencing difficulties recruiting staff.
- Concerns around regulation and taxation regularly trouble a third of firms (30%).
Shevaun Haviland, director general of the BCC, said:
"We know we have a tough year ahead. With costs piling up on their doorsteps and so much uncertainty on Government policies, there is currently little incentive for firms to risk either their dwindling cash reserves or fresh loans on new projects.
"Firms know that the UK's finances are tight, but the Chancellor needs to show more faith in the ability and talent of our businesses."
Hunt takes tax cuts off the table
In his speech at Bloomberg HQ in January, the Chancellor stated that the Spring Budget would not focus on cutting taxes but instead take aim at the country's soaring inflation rate.
Hunt said:
"My party understands better than others the importance of low taxes in creating incentives and fostering the animal spirits that spur economic growth.
"But another Conservative insight is that risk-taking by individuals and businesses can only happen when governments provide economic and financial stability.
"So the best tax cut right now is a cut in inflation."
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