Small firms’ confidence rises and GDP growth heralds end of recession
The UK is officially out of recession as GDP rose by 0.6% in Q1 2024, and by 0.4% in the month of March, as announced by the ONS this week. This follows hotly on the heels of the publication of the quarterly Small Business Index (SBI), also this week, which finds that small business confidence levels are up. FSB National Chair Martin McTague said: “The rise in GDP across Q1 brings the recession from the end of last year to a mercifully swift end and comes alongside a notable rise in small business sentiment over the first three months of this year. the challenge now is to build on this momentum. Small firms will be listening carefully to political parties of all stripes as they set out their stalls and measures which will lift their growth prospects will be especially welcome.”
Small Business Index latest revealed on Sky News
Small firms’ confidence is back in positive territory, after nearly two years of below-zero readings. That’s the headline finding from FSB’s Small Business Index (SBI) report for Q1 2024, the first results from which were released this week. FSB’s Chief of External Affairs Craig Beaumont told Sky News’s Ian King that “small businesses are telling us, look, we're feeling a bit more confident, and the economy feels more stable”. The SBI was also covered in The Times and City AM.
GDP up, but base rate stays flat
The UK economy grew in the first quarter of 2024, the ONS said Friday, with Q1 seeing GDP rise by 0.6%. FSB welcomed the news, with National Chair Martin McTague saying: “The rise in GDP across Q1 brings the recession from the end of last year to a mercifully swift end, and comes alongside a notable rise in small business sentiment over the first three months of this year.” Yesterday’s news that the Bank of England has decided to keep the base rate at 5.25% was, however, a “missed opportunity,” he said, adding: “Our most recent research into small businesses’ economic prospects supports the argument for a summer cut in the rate.”
Martin McTague receives OBE from the HRH the Prince of Wales, on behalf of the King
FSB National Chair Martin McTague attended the investiture at Windsor Castle this week, where he was presented with his OBE for Services to Small Businesses, from HRH the Prince of Wales. Martin received the Honour in His Majesty King Charles’s New Year Honours List 2024.
New Treasury Committee report backs FSB’s recommendations to curb de-banking
The Treasury Select Committee published its inquiry into the accessibility of funding and lending to SMEs, which FSB gave evidence to, with a particular focus on de-banking. The Government has listened to FSB’s case on de-banking and agreed that all banks should report data on all account closures to the Financial Conduct Authority (FCA) on a three-monthly basis and said that the FCA should be doing more to prevent de-banking. The committee also adopted FSB’s position on Basel 3.1 – a global set of rules introduced to ensure maintain enough physical capital to handle financial crises without collapsing. FSB National Chair Martin McTague said: "The Treasury Select Committee is an influential and powerful parliamentary group, and we're glad they've listened to us in this important report into SME finance."
Secretary of State joins FSB roundtable on AI skills
Secretary of State for Science, Innovation and Technology Michelle Donelan and Minister for Tech and Digital Economy Saqib Bhatti were welcomed by FSB for a roundtable on AI skills. The event looked at a range of important topics, spanning AI skills training and adoption for small businesses, how to grow AI literacy in the business community, and how to overcome the challenges that stand in the way of AI adoption. A new flexible AI upskilling fund was also launched at the event, to part-fund AI skills training for small businesses and their employees. The roundtable, hosted by FSB’s deputy policy chair, Ian O’Donnell, was also attended by FSB members and representatives from Xero, the British Chambers of Commerce (BCC), and Google.
AI upskilling: New grant funding for SMEs
Following a report and successful campaigning by the Federation of Small Businesses for Government support to upskill SMEs in AI, the Department for Science, Innovation and Technology announced a £7.4 million pilot scheme to subsidise the cost of AI skills training for small and medium-sized enterprises (SMEs) in the Professional Business Services (PBS) sector. £6.4 million of grant funding is available. Through this pilot programme, eligible businesses can apply for funding for up to 50 per cent of the cost of AI skills training. This refers to training that supports employees in developing their technical skills and understanding of AI to deploy or use AI in their role. Apply for a grant before 12pm, 31 May.
Energy efficiency funding for small businesses in Northern Ireland
Small businesses in Northern Ireland are invited to apply for Invest Northern Ireland’s Energy Efficiency Capital Grant (EECG) Scheme, which the UK Government funds through the UK Shared Prosperity Fund, to improve energy efficiency. The £20 million fund will offer grants of up to £150,000 per business to small firms in Northern Ireland to help reduce energy costs and build resilience through improved energy efficiency. It will offer grant support to buy and install energy-efficient equipment that reduces energy and carbon emissions. Businesses can apply for funding via the Invest Northern Ireland website.
National Living Wage: Last chance for small employers to have a say
FSB is calling on all small business employers to have their say in its survey on the National Living Wage (NLW) before it closes on Monday. The survey asks about important areas for employers, including the impact of the recent increase in the NLW which came into effect in April 2024. The results will help to evidence FSB’s recommendation that Employment Allowance should be uprated in line with the NLW, and inform wider policy recommendations to the Government, political parties, and the Low Pay Commission. The survey closes on 13 May.
Imports: New guidance for small firms on EU product imports
Following the introduction of new import controls on plant and animal products from the EU on 30 April, the Government has compiled a site to answer frequently asked questions (FAQ) on import controls and help small businesses navigate the Broader Target Operating Model (BTOM). Urgent queries concerning the import of plant products can be directed to the Animal and Plant Health Agency by email. Small businesses with Urgent queries relating to the import of animal products should contact the Port Health Authority (PHA) through local Border Control Posts. Contact details for local PHA Control Posts can be found on this map.
Government seeks SME views on conformity assessment requirements in the USA
The Department for Business and Trade (DBT) is offering UK manufacturers the opportunity to share their experiences of dealing with mandatory conformity assessment requirements, such as certification, inspection, registration, type approval, and testing requirements for products exported to the United States. DBT is asking to share details of the costs incurred by small firms and the challenges that businesses have faced throughout these processes. The survey is open to all small manufacturers.
Data adequacy: FSB gives evidence to European Affairs Committee
FSB gave evidence to the House of Lords European Affairs Committee this week on UK-EU data adequacy agreements. FSB’s policy champion for international affairs, Neil Warwick, told the committee about the importance of maintaining data adequacy for small businesses, which is vital to maintaining the smooth flow of data across borders. During the session, Neil raised the importance of having adequate resources available for small businesses to minimise the time they need to spend on compliance. The full session is available on Parliament TV.
FSB gives evidence to the Scottish Parliament Committee on UK-EU Trade
FSB's senior international advisor, Kate Foster, gave evidence to the Scottish Parliament's Constitution, Europe, External Affairs and Culture Committee, as part of its inquiry into the EU-UK relationship. Kate highlighted ongoing issues facing small firms in Scotland and across the UK regarding EU trade, setting out FSB’s key priorities for reducing trade friction, such as a veterinary agreement to reduce checks on animal and plant products, improving business mobility, and removing the requirement for UK businesses to appoint a fiscal representative in EU Member States. The full committee session is available via the Scottish Parliament’s website.
Tackling the disabled entrepreneurship and employment gap in Scotland
This week, FSB’s deputy head of policy, Vikki Manson, gave evidence to the Scottish Parliament’s Economy and Fair Work Committee on the disability employment gap. Following on from FSB’s response to the Disabled Employment Gap Inquiry in 2023, she highlighted how important disabled-owned small businesses are to the wider UK economy, outlining the challenges faced by disabled entrepreneurs and in disability employment. FSB is calling for the Scottish Government to do more to overcome barriers to disabled entrepreneurship and employment, as outlined in FSB’s Business without Barriers report. Successfully addressing both areas, would also help to dramatically decrease Scotland’s economic inactivity rate, which stands at 22.6 per cent.
Pub and Bar licensing hours
The Home Office has announced that it will extend pub and bar licensing hours throughout the country if England or Scotland reach the semi-finals of the UEFA Euro 2024 tournament.
Celebrating Europe Day
A reception to mark Europe Day was held this week, which celebrates peace and unity in Europe. The event was attended by FSB, alongside EU Ambassadors, including Pedro Serrano; the Secretary of State for Northern Ireland Chris Heaton-Harris, and Minister for Europe Nusrat Ghani. The speakers highlighted the need for continued dialogue between the UK and its European partners and noted achievements such as the agreement of the Windsor Framework and the UK rejoining Horizon Europe.
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