The government needs to concentrate on prioritising economic stability in this month’s budget, according to the Federation of Small Businesses. A call that is also likely to be endorsed by umbrella company contractors.
Including freelancers, there are around 5 million small businesses in the UK and they are in the perfect position to help the economy grow. A lot may be able to create job opportunities for casualties of the government spending cuts but only if the country has economic stability.
Continued economic uncertainty led to a decline in confidence and hiring intentions fell amongst SMEs in the final quarter of last year. The FSB is now calling on the government to implement various measures to boost small businesses including extending the National Insurance holiday to 12 months. The holiday would be applicable to firms that currently employ less than four staff and would allow them to hire an extra three members of staff. Such a measure could create a huge surge in opportunities.
The FSB also wants the government to reverse April’s scheduled increase in fuel duty and would like to see the introduction of a fuel duty stabiliser. Micro-businesses should be given finance to fund apprenticeship schemes in a bid, which would help tackle youth unemployment. Furthermore, the FSB has called for an extension of the Graduate Internship Scheme which is due to end on March 31st.
Confidence amongst contractors may drop slightly after the Institute of Directors predicted that GDP growth this year will be a mere 1.2%. The IoD says that interest rate rises and a decrease in household income will result in reduced consumer spending.
The chief economist of the Institute, Graeme Leach, believes that raising interest rates could undermine the economic recovery and risk a double-dip recession. The MPC should avoid increasing the base rate and continue with the planned spending squeeze, he added.
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