smallbusiness.co.uk: Helping your business think big

The Federation of Small Businesses (FSB) has given a lukewarm reaction to the Chancellor of the Exchequer’s Pre-Budget Report, delivered to the House of Commons today.

The FSB welcomed a number of initiatives including added assistance for small businesses to seek protection for their trademarks and protection for law-abiding businesses from competitors who avoid paying the minimum wage.

However, the organization was less pleased with the lack of an announcement on reducing the complexity of the taxation regime, a threat to force business to train their staff regardless of their individual needs, the plan to introduce road pricing and a rise in fuel duty.

John Walker, FSB National Policy Chairman, says: ‘At first glance the Pre-Budget Report has a ‘some you win, some you lose’ feel to it for our members. As in previous years there were some welcome measures in the Chancellor’s speech but there were also parts of the speech that will hit small businesses very hard.’

Turning to specific points in the speech Mr Walker comments as follows:

On increased transport taxes:

‘We are very concerned that small businesses will be collateral damage in the drive for cleaner cars. Small businesses cannot change their journey times or ditch their current vehicle today and buy a new one tomorrow. Greener vehicles should be taxed more lightly…Specific measures will be required for rurally-based businesses that cannot access public transport.

‘A successful economy depends on being able to move goods, services and people across the country. Increasing aviation and fuel taxes will not help small business to increase productivity. However, we welcome the decision not to re-instate the fuel duty escalator.’

On measures to police the minimum wage:

‘We welcome the move to police the minimum wage more effectively. Our members are the most affected by those who act illegally to undercut them. The monitoring of the minimum wage need not be heavy-handed or time-consuming for small businesses but it should hit law-breaking employers hard.’

On risk-based business inspections from local authorities:

‘We have campaigned long and hard for risk-based business inspections to ensure that inspection authority resources are targeted at the right areas. This welcome move will also remove a large burden from many low-risk businesses.’

On the absence of measures to simplify small business taxation:

‘After several years of increased complexity it is very disappointing that there was no signal of a change in direction on the complexity of the tax regime. It has cost small businesses a lot of time and money over recent times to comply with tax form requirements or hire external expertise.’

On increased spending in education and skills:

‘Our members constantly tell us that school-leavers do not have the required literacy and numeracy skills to allow them to contribute to the business from their first day at work. They also do not possess the so-called softer skills such as effective communication, punctuality and self-presentation. Extra money is not enough. The current system is obviously not working and before the new money is wasted radical reform for the education sector is desperately needed.

‘An expanded apprenticeship scheme is good news and a greater emphasis on skills for the workplace will be welcomed by many of our members.’

On the Leitch Review Colin Willman, FSB Education Chairman, commented:

'Lord Leitch’s review on skills is a constructive first step towards providing businesses with the capable workforce that it needs. He is right to say that skills provision must be led by demand from businesses. The requirements of small business must be a priority because they employ 58 per cent of the private sector workforce. Our average member employs four people. They need bite-sized courses, based in the workplace, to avoid losing a large proportion of their workforce when only one member of staff is being trained. This will enable small business to train their staff and will also avoid the need for heavy-handed Government compulsion.'

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