Federation of Small Businesses (FSB) national chairman Mike Cherry has called for urgent government action to help UK business navigate extremely challenging economic circumstances, including badly impacted supply chains.
Responding to the latest Office for National Statistics (ONS) figures, which show a 9.9% drop in UK gross domestic product (GDP) over 2020, Cherry said such a fall in GDP of this magnitude “isn’t just an economic statistic. It is missing businesses, missing jobs, and livelihoods in tatters”.
“We urgently need to see the government come forward with its road map to recovery,” he added. “The success of its plan for jobs will hinge on the right plan for small businesses and the self-employed. Action in the coming weeks, before a pro-business Budget next month, would mark a real statement of intent.
“A big share of the welcome business support provided to date has been directed at consumer-facing firms, but those who supply to them are also in real trouble. It’s simplistic to see this as a crisis affecting only a handful of sectors. It’s simply not good enough for government to ignore small suppliers.
“Thousands of small firms down supply chains – many of which sell to retail, leisure and hospitality businesses – are not benefiting from rates relief or cash grants. They are being overwhelmed by costs and are often at the sharp end of a worsening late payment crisis. Extending current measures – and building new ones – to help suppliers is essential. Creating fresh measures around assessments of lost revenue, rather than property or industry, marks the way forward.”
Cherry also said that with unemployment rising, firms are crying out for renewed efforts to promote job retention and creation. He suggested that cutting employment costs – by reducing employer national insurance contributions or reintroducing a job retention bonus – would have a real impact, helping employers to get staff off furlough and into work.
Despite the difficult picture painted by the FSB, optimism over the global economic recovery is continuing to lift markets at the start of a new week.
This morning investors have been driving asset prices steadily higher, as they bet that successful vaccine rollouts will allow economies to reopen – and that central banks and governments will continue to support the recovery through higher spending and record low borrowing costs.
The pound is strengthening against the US dollar, and in early trading on 15 February was up half a cent to $1.39 for the first time since the end of April 2018.