Autumn Statement needs to boost confidence among SMEs
3 min read
03 November 2016
With the referendum vote having hit UK confidence, chancellor Philip Hammond's first autumn statement needs to be filled with support.
SMEs are forecast to contribute £217bn to the UK economy in 2020, according to Hampshire Trust Bank and the Centre for Economics and Business Research. The two expect SME contributions to have grown by 11 per cent in that time – and to help the findings along, there have been cries for business growth support to be included in the Autumn Statement.
With London being set to increase its £149bn contribution to £164bn in 2020, the government needs to get serious about SMEs in its 2016 Autumn Statement – so says Mike Cherry, national chairman at the Federation of Small Businesses (FSB). “Smaller businesses are coping with huge challenges and an uncertain economic outlook. For us to create growth and jobs, and drive productivity, we want to see the chancellor deliver an Autumn Statement that provides much-needed support for small businesses.”
This requires a heavy dose of confidence. The FSB’s most recent research showed small business confidence is in negative territory for the first time in four years. And given that over half its members are looking to grow in the next 12 months, Cherry explained, the government should be looking to lesson the burden of the domestic challenges UK SMEs are likely to face.
“Improvements to our national infrastructure are critical if the UK is to remain competitive in the global economy,” Cherry explained. “Delivery of major infrastructure projects such as Hinkley Point and Heathrow are of course important, but it is also clear that small businesses across the UK have long suffered from underinvestment in local road networks. Focused spending in this area, together with the delivery of smaller scale improvement and maintenance projects and a push for majority-UK small business supply chains and procurement, will boost connectivity and growth.”
Government support is especially necessary since the referendum vote, Cherry suggested. There’s already a great deal of uncertainty around the future of funding for EU projects, for example.
“There has already been a slowdown in applications for EU funding, impacting on longer term projects. Small firms want to plan for the future and many currently rely on EU-funded local infrastructure, business support and access to finance projects.
“This is an opportunity for the government to undertake a full root-and-branch review of the current funding streams to consider what’s working well and what could work better. This will help prepare the way for when we finally exit the EU – with the aim of providing better targeted schemes that address the needs of UK small businesses. The Autumn Statement should set out the chancellor’s approach in this area.”