23 April 2018

The Government needs to recognise the part played by small firms in helping to achieve last week’s record employment rate of 75.4%, the Federation of Small Businesses (FSB) has pointed out.

Creating these high levels of employment comes at a cost, FSB National Chairman Mike Cherry said, and, with the national living wage (NLW) and auto-enrolment contributions for employers all rising, that costs is getting higher.

"Retailers are increasingly feeling the strain," he stressed, "as rising employment costs are coinciding with another round of business rates hikes for thousands of small shops."

Mr Cherry said that raising the Employment Allowance to £4000 would go some way to helping to ensure that the record numbers of people are still in work over the months ahead.

He also highlighted that SMEs are preparing for a small Bank of England rate rise in the coming months and warned that any increase must be gentle enough for these firms to absorb, otherwise the Bank will put at risk recent gains in economic confidence and investment.

Mr Cherry also complained about the Universal Credit system which, he argues, poses a threat to UK entrepreneurship.

"We know it takes at least two to three years to get a firm off the ground," he explained. "Enforcing the Minimum Income Floor for the self-employed after 12 months is anti-business, pure and simple. The Universal Credit regime should reflect this reality."