Employment Bill will “wreak havoc” on already fragile economy, say small firms
Small firms are cutting back on jobs due to the potential changes in the new Employment Rights Bill, research from the Federation of Small Businesses shows. Two-thirds say the proposals in the Bill would make them scale back on hiring and a third plan to reduce the number of employees they have before the measures are introduced. 75 per cent of small employers highlighted fears relating to unfair dismissal changes and 74 per cent are worried about covering the extra costs of additional Statutory Sick Pay. FSB’s policy chair, Tina McKenzie, said: “Ministers should recognise the risk to jobs and resist any approach that comes across as out of touch with business reality.” The story was widely reported in the media, including on Sky News, LBC and LBC News, The Times, The Express, and City AM.
Small business confidence slumps
Small business confidence in all sectors hit its lowest ever recorded point outside the Covid-19 pandemic in the last quarter of 2024 (Q4), FSB’s Small Business Index (SBI) shows. The figures, released this week, show how accommodation and food services were the most pessimistic major sector, followed by wholesale and retail. FSB’s Tina McKenzie told The Guardian: “Small firms are understandably nervous about their prospects as 2025 gets underway,” while FSB’s National Chair appeared on BBC News.
FSB gives evidence on Scotland’s New Deal for Business
Scotland’s New Deal for Business has delivered tangible benefits for the country’s small businesses, FSB has told Members of Scottish Parliament (MSPs). Speaking to the Scottish Parliament’s Economy and Fair Work Committee, FSB’s Director of Devolved Nations, Colin Borland, said the New Deal has improved early consultation and regulatory assessments. However, he underlined the need for urgent action to address the immediate challenges facing small businesses, particularly rising costs and cash flow pressures. He added: “The Government must go further to ensure small firms are not just consulted but are genuinely heard.”
Inflation jumps to three per cent in January
The Consumer Prices Index (CPI) rate of inflation rose by three per cent in the 12 months to January 2025, the Office for National Statistics reported. This was higher than economists had forecast and is bad news for small business owners, many of whom are already experiencing pressure on their cost margins. The increase was largely driven by higher prices for transport and food and drink.
Championing apprenticeships in Wales
FSB Wales joined Plaid Cymru’s Treasury spokesperson, Ben Lake MP, to discuss the importance of apprenticeships with FSB member Ali Wright, owner of Needle Rock, an upholstery business in the west of Wales. They also touched on the impact of recent tax hikes, upskilling the workforce, and how to improve job creation.
Breaking down EU regulatory barriers
The difficulties that EU regulations are causing small firms were discussed at a meeting between Head of FSB Northern Ireland, Roger Pollen and Ciara Ferguson, the new chair of the Northern Ireland Assembly’s Windsor Framework Democratic Scrutiny Committee, and Deputy Chair David Brooks. During the meeting, FSB provided suggestions on how the Assembly could help small firms identify new opportunities across both UK and EU markets.
Help shape AI and copyright for the future
Twenty per cent of small firms are already using AI (FSB, 2024), but with its rapid growth, the need for a balanced regulatory framework is urgent. Small businesses are now invited to take part in a Government consultation to help it shape a policy that works for “world class creative industries and AI innovators.” The Intellectual Property Office said that it needs to hear from a wide range of voices about what would strike the right balance. The Artificial Intelligence and Copyright Consultation closes on 25 February.
Strengthening UK-EU relations for small firms
FSB met UK Government representatives in Brussels this week, alongside SMEunited, which represents European SMEs, and other industry bodies from across Europe. They discussed the UK-EU reset and review of the Trade and Cooperation Agreement (TCA), which is due to happen in 2026. FSB research shows Europe is the top export and import market for UK small firms. In the upcoming review, UK and EU governments now need to address the unintended consequences the TCA is having on small businesses and remove unnecessary trade barriers.
Supercharging small business exports
FSB research shows a third of non-exporting small firms would consider doing so in the future. A total of 41 per cent of small firms say general information on how to start exporting would be the most beneficial tool to help prospective small exporters explore entry to a new market. The Export Academy is organising a webinar on how to develop a clear and effective export plan, which will take place on 25 February. Small businesses can find out more information and register for the event on the Department for Business and Trade’s website.
Working safely with display screen equipment
The Health and Safety Executive (HSE) is reminding small employers of their legal obligations to protect members of staff who use screens, such as laptops, desktop computers, and smartphones. Using screens incorrectly, or at poorly designed workstations, can lead to long-term health issues such as back pain and a deterioration in vision. A number of resources on how to work safely with screens are available on the HSE website, including workplace guidance for employers, and managing homeworking environments.
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Copyright: Federation of Small Businesses (FSB Westminster) 2025. All rights reserved.