One million small firms have been left out of the government’s coronavirus support business, the Federation of Small Businesses (FSB) has warned.
According to an FSB survey of more than 1,000 small business owners, one in five (22 per cent) said that they have received no financial help at all from the UK government since the start of the pandemic.
Despite the widespread roll-out of government-backed loan and furlough schemes, new analysis by the FSB has found that more than half (56 per cent) of workers furloughed to date are employed outside of the retail, leisure and hospitality sectors.
However, firms that do not neatly fit the definition for these industries – including suppliers to hotels, restaurants and event venues – are only entitled to around 10 per cent of support grants.
In response to this research, the FSB has called on the government to extend business rates reliefs and cash grants, bring workers back from furlough before the job retention scheme ends, and introduce support for suppliers, directors and the newly self-employed.
“The Chancellor’s plan for jobs will only succeed with the right plan for businesses,” said Mike Cherry, the national chairman of the FSB.
“Firms need help to bring furloughed workers back in the near-term alongside long-term measures to help them manage the ongoing impact of lockdowns.
“While the government rightly moved at pace last Spring to deploy business support, we can now see the shortcomings of a sector and property-based approach. Small firms which sell to other businesses outnumber those which sell to consumers three to one – thousands don’t have a commercial premises or neatly fit the definitions of retail, leisure and hospitality. Too many have been left out of support measures as a result.
“We urgently need to see support measures extended to the hidden heroes within our supply chains who tirelessly drive our economy forward. It’s not too late to bring those left out into the fold, but the Chancellor needs to act fast.”
One in three (34 per cent) of SMEs have told the FSB that their business rates bill has risen over the past five years, with 52 per cent of small business owners noticing a reduction in their profits due to soaring bills.
A third (32 per cent) of those with rising rates bills said that they would be more likely to take on staff if their rates bill fell, and 26 per cent said that a rates cut would mean they could afford to take on an apprentice.
“Last year we suffered the biggest GDP drop in modern history,” added Cherry.
“We now need the most ambitious, pro-business Budget in modern history to reverse the damage.”