With the snow and bad weather costing the economy between £600m and £1bn per day, the Federation of Small Businesses (FSB) wants the government and the banks to give hard-hit SMEs the breathing space they need to stay afloat over the holidays.
“We need to see a coordinated effort from government, banks, local authorities and landlords,” says John Walker, chairman of the FSB.
“Small businesses were banking on a good Christmas to make up for a bad year, but last weekend saw a drop in footfall of up to 30 per cent, leaving businesses with increased overheads and falling trade.”
The snow, plummeting confidence levels and the forthcoming VAT rise mean a bleak new year with many businesses struggling survive through the early part of 2011.
Measures that the FSB recommends to help SMEs:
- HMRC should extend its Time to Pay scheme to allow SMEs to recoup lost takings and have cashflow to tie them over
- Landlords – especially when the landlord is the local council – should push back rent reviews due in the new year
- Local councils should use their powers to grant hardship relief and temporarily reduce business rate bills for businesses in difficulty
- Banks, utilities and insurers should give small businesses more breathing space
“The last thing this government needs is a wave of bankruptcies and shop closures in 2011, but small firms will find it very difficult to bounce back in the new year when VAT increases to 20 per cent and the spending cuts start to bite,” adds John Walker.