Tina McKenzie,
Policy Chair
Foreword form the report
The fourth quarter blues reported by small firms in this survey underline how urgently the Government’s growth push is needed.
Small firms are understandably nervous about their prospects as 2025 gets underway.
The upcoming Employment Rights Bill is a major source of stress for small firms, with nine in ten business owners saying they are concerned about its introduction, and this is undoubtedly a major cause of the very subdued confidence levels seen in our research.
On the plus side, the Government’s plans to reduce late payment – a perennial source of financial pain and misery to small firms – cannot come soon enough. Improving small firms’ cashflow will relieve countless headaches, and free up the mental space for them to make plans to invest – based on reliable cashflow predictions, rather than subject to the whims of their customers.
The Government has called for regulators to put forward ideas to nurture growth, while we sent our own list of suggestions targeted at helping small businesses, which we look forward to seeing adopted within the regulatory system. We would encourage the Government to extend this push to more of a pro-growth mindset to HMRC as well. Small firms collectively spend £25 billion and 280 million hours on tax compliance each year; reducing those amounts even by just a few percent would be great news for oductivity, and for stress levels among small business owners.
In the Spending Review, the Government must prioritise spending on programmes that will deliver small business growth.
The King’s Speech later this year should include a Small Business Bill, to bring together the different strands of support and reform needed to give people dreaming of starting their entrepreneurship adventure the confidence they need to go for it, and to help people running small enterprises and in self-employment to expand and fulfil their potential.