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MPs take unusual step of pushing Government for
a completely new response to major report on small
business and UK high streets, saying:
Come back with a response that rises to the
challenge"
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Committee is pressing for a more coherent and
ambitious plan for the businesses that make up the
backbone of the UK economy
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Unsustainable cost pressures on UK small business
only likely to grow without changes in line with BTC
recommendations
Ahead of Secretary of State Peter Kyle's appearance on Tuesday 7
July, the Business and Trade Committee has asked the Department
to reconsider the Government's inadequate response to proposals
to improve UK plans for small business growth.
In February of this year the Committee reported that small
businesses across the UK were facing cost pressures
comparable to the conditions of the pandemic, but without
pandemic-style support packages. As a result small business are
closing their doors at a rate that threatens high streets and
growth across the economy.
The Committee is pushing back on a Government response that
restates pre-existing schemes and commitments and only
fully accepts six out of 36 of the Committee's
recommendations - after an inquiry that heard scores of
small businesses describe the cumulative burden of
policy decisions taken with no regard for their
combined impact on SMEs.
On tax, the Committee says Treasury ministers have failed to
engage with recommendations on business rates, VAT and tax
administration, leaving major problems unaddressed. Research from
Professor Ben Lockwood shows that a 1 percentage point reduction
in the tax rate reduced the vacancy rate for eligible properties
[on high streets] by 5%.
Since the report was published, the Federation of Small
Businesses has described a new cost crunch as energy
standing charges rise by 40%, business rates are expected to
increase 52% over the next three years, while minimum wage and
Statutory Sick Pay costs also rise.
The Committee has particularly serious concerns about
the response in six key areas, where it calls for an urgent
rethink and fresh proposals from Government to ward off cost
pressures that will only worsen otherwise an unsustainable,
unacceptable prospect.
It says Government must bring forward with a whole new
response, within two months, with better proposals on
procurement, tax, energy costs, the cost of crime, bogus
self-employment and protections for franchisees.
Rt Hon MP, Chair of the Committee,
said: Rt Hon MP, Chair of the Business and
Trade Committee, said:
"Small business is the backbone of Britain's economy, but too
many now feel they are carrying a burden that is becoming
impossible to bear.
When we published our report in February, we warned that many
firms were facing cost pressures comparable to the pandemic.
Since then, those pressures have only intensified.
"We welcome the Government's willingness to listen in some areas
but too often it is repeating existing announcements, not
confronting the problems businesses told us about first hand.
"Growth begins with small business. If Britain is serious about
growing the economy, reviving our high streets and creating good
jobs, we need a bolder, more ambitious plan to help small firms
invest, hire and thrive. That is why we are asking ministers to
think again and come back with a response that rises to the
challenge."
