- Debt burden hammering small business as Labour calls for rate
freeze to boost growth
New analysis from Labour has revealed the debt burden weighing
down British businesses. The figures show thousands of British
businesses are currently paying out more on debt than they are
bringing in in sales.
A whopping 150,000 firms are paying out more than half of what
they bring in to service their debt burden while 75,000 firms are
paying out more in debt than they are bringing in.
Ahead of small business Saturday, Labour has criticised the
Government’s failure to create sufficient economic
growth. Shortages from strained supply chains, combined with
higher prices and a high debt burden is battering Britain’s
balance sheets.
The Party is calling on the Government to freeze business rates
which could save the average small factory or shop
£4,000. Labour would freeze rates this year as well as scrap
and replace the rates system all together. Labour has
also called for more flexibility around repayment of Covid loans,
with firms paying when they’re back and making profit.
The figures come as concerns are growing among businesses that
Conservative tax hikes, the high cost of energy and mounting debt
built over the pandemic are creating a “perfect storm” that
threatens to push business over the brink.
, Shadow Secretary of
State for Business and Industrial Strategy
said:
“Mounting debt combined with tax hikes, rising inflation and
energy prices threatens to close the shutters on thousands of
British businesses.
Small businesses are the heart of our high streets, but they have
been let down time and time again by the chaos and complacency of
the Conservatives which is choking off economic recovery.
Labour would freeze business rates next year saving
businesses thousands of pounds before replacing with a
fairer system, to protect our high streets and help ensure higher
costs aren’t passed onto consumers.”
ENDS
Notes to editors
- Data on debt repayments in relation to turnover comes from
the ONS’s fortnightly business survey.
Business insights and impacts on the UK economy, wave 43,
November 2021, https://www.ons.gov.uk/releases/businessinsightsandimpactontheukeconomy2december2021
- Number of businesses estimated using BEIS business population
estimates
October 2021, https://www.gov.uk/government/collections/business-population-estimates
