Small business owners based in London are more pessimistic about their future than anywhere else in the UK, as the Covid-19 pandemic and ongoing lockdowns take their toll.
According to the most recent London Small Business Index (LSBI) by the Federation of Small Businesses (FSB), business owners in the capital are growing less confident about their ability to survive the pandemic, with business confidence falling to -61 in the fourth quarter of 2020, compared with a score of -26 for the previous quarter. Nationwide, small business confidence was at -33 during this time period.
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A net balance of -24 expect to see their profits grow in the first quarter of 2021. This compares with a balance of -6 in the East Midlands, -17 in the East of England, -23 in the North West and -14 in the South West.
Almost one third (30 per cent) of London-based small businesses reduced staff numbers over the fourth quarter of last year.
In response, FSB London has called for more cash grants to be paid to London-based businesses, along with a directors income support scheme which allows directors of limited companies to receive the same financial support as those who have been eligible for the Self-Employed Income Support Scheme (SEISS).
The FSB has also called on the government to offer more help for the recently self-employed, and to extend the deadline for the bounce back loan scheme.
“Government must recognise the huge contribution that London businesses make to the rest of the UK economy and concentrate on policies that will shore up business confidence in the short term,” said Rowena Howie, FSB London policy chair.
“Access to finance and debt accumulation are significant concerns and so government must put in place a bold business support infrastructure as many cannot wait for a March Budget.
“It is also vitally important that we create further export support to London businesses looking to enter new markets – particularly Ethnic Minority Business (EMB) owners who are more likely to export than non-EMB owners in London.”