FSB launches Five Point Plan to create 400,000 new jobs

The Federation of Small Businesses (FSB) today[Monday 12 January] launched its blueprint for tackling rising unemployment with a plan to create 400,000 new jobs.

Ahead of the Government’s New Year Jobs Summit, held today, the FSB outlined five ways to create and retain jobs in a rapidly shrinking job market, identifying unemployment as the big challenge of the coming year.

The FSB’s Five Point Plan identifies promoting part-time working; investing in apprenticeships; simplifying legislation; giving small businesses more opportunities to bid for public contracts; and cutting payroll taxes, as the key to unlocking the challenge of unemployment.

The FSB blueprint provides a framework for creating sustainable quality jobs in the small and medium-sized business sector, which employs more than half of the private sector workforce.

By decreasing the burden of regulation on business, the Government could increase the number of jobs by 160,000 and save 73,000 jobs by preventing company closures. Following the example of the Enterprise Allowance Scheme in the 1980s, the Government could also take 191,000 people out of unemployment in four years and help them into self-employment. This would not only help grow the economy but could in turn create more jobs as these small businesses flourish.

Unemployment falls hardest on the 16-25 year group. Small businesses are invariably employers of those who might otherwise struggle in the job market. Small businesses are also more likely to employ those out of work for longer, or looking for more flexible working patterns. The FSB blueprint would see more of these people given opportunities to work.

Making it easier for small businesses to win public procurement contracts would also see local investment double, while cutting payroll taxes, by raising the National Insurance Contributions threshold, would make it less costly for businesses to employ and retain staff and put money back into employees’ pockets.

FSB National Chairman, John Wright, said:

“The FSB’s Five Point Plan is going to be vital to creating and retaining jobs in the small business sector during what is going to be a challenging year, with unemployment on the rise.

“We are calling for the Government to help small businesses to continue to invest in recruitment and training so they can grow stronger and more competitive, creating quality jobs and doing their bit to pull the UK out of the recession as quickly as possible.”

Ends

Notes to Editors

1. The FSB is Britain’s leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk

2. The Government’s Department for Business, Enterprise and Regulatory Reform (BERR) Annual Survey of Small Businesses opinions and the FSB survey of members both show high levels of concern about the effect of regulation on business growth. Of small businesses who wanted to grow, 27 per cent cited regulation as a very important factor limiting growth, while of businesses intending to close, 50.7 per cent listed regulation as a very important reason for their closure.

3. According to the Paymaster General, in 1986 the Enterprise Allowance Scheme lifted 191,145 people out of unemployment into self employment over four years. Of these businesses, 54 per cent were still trading after three years; 39 per cent of them had taken on employees. Hansard HC Deb 16 December 1986 Vol 107 cc509W

4. According to the OECD, the unemployment rate of 16 to 24 year olds was 14.4 per cent in Britain in 2007, compared to 11 per cent in 2002. In the past, rising levels of unemployment has affected young people under 25 more than any other age group.
5. Local councils in Essex found that awarding contracts to small businesses in their area or within the county is cost effective, offers quicker turnaround time and greater flexibility while at the same time keeping the carbon footprint low as delivery distances are less. More than £574 million was spent with local businesses by the councils in Essex during the last financial year and 83p in every £1 spent with a local business went back in to the local economy, helping to sustain local jobs.
6. For a copy of the policy document, The FSB Five Point Plan for job retention and creation, please contact Sophie.kummer@fsb.org.uk

Contacts:

Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 7592 8128 / 07917628998
Prue Watson: 020 7592 8121 / 07825 125695
Marc Shoffman: 020 7592 8113 / 07595 067068

For regional FSB contacts please go to www.fsb.org.uk/regions