Small firms will look to the upcoming Autumn Statement for signs that the government understands their operating concerns, says the Federation of Small Businesses (FSB).
The business group said that UK businesses need urgent action to help stem the issue of late payment. It says that large corporates use late payments to offset interest rate rises by ‘demanding, in practice, free credit from their supply chains‘.
The FSB is also urging Chancellor Jeremy Hunt to overhaul the business rates system and has called for an extension of the 75% business rates discount for small and medium-sized enterprises (SMEs) in the retail, hospitality and leisure sectors, as this discount is set to expire in April 2024. It said that these sectors have been ‘acutely affected’ by falling confidence levels and economic headwinds.
Martin McTague, National Chair of the FSB, said that the recent decision by the Bank of England not to raise interest rates will ‘give firms breathing space’.
‘[The] unexpectedly large drop in GDP is a sign that the painful interest rate rises we have endured are acting as predicted, and we urge the Bank to allow time for the lag between rate hikes and the full effect on spending to be fully observed, so that there is less risk of overshooting and causing unnecessary economic damage.
‘Small firms need some respite, and now will look to the Autumn Statement for signs from the government that it’s listening and understands their concerns. As a nation, we urgently need action to stem late payments, which are used by large corporates to offset interest rate rises by demanding, in practice, free credit from their supply chains.’
Chancellor Jeremy Hunt will deliver the 2023 Autumn Statement on 22 November.
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