UK tax regime must change, FSB warns, as unemployment figures due to rise

FSB-ICM research shows that small businesses are keen to grow but need the right conditions to employ more people to help strengthen economic recovery.

More than half of small businesses surveyed by the FSB-ICM January survey panel say UK taxes have prevented them from taking on more staff, as employment statistics due tomorrow are expected to show a rise in unemployment.

Businesses in the South East feel particularly strongly, with 64 per cent saying taxes have a negative impact, closely followed by the North West at 60 per cent and London at 59 per cent. Across the country the figure is 58 per cent. Concerned that the temporary boost to employment figures provided by the Christmas period is coming to an end, the FSB is stepping up its call to Government to freeze National Insurance Contributions and provide a National Insurance rebate for small businesses with fewer than 50 staff that take on more employees during 2010-11.

In late 2009, the FSB-ICM ‘Voice of Small Business’ Annual Survey showed that 19 per cent of small businesses would take on new staff over the next 12 months in order to achieve business objectives, with London (27%), Northern Ireland (25%) and the North East (23%) the most likely to do so.

John Wright, National Chairman of the Federation of Small Businesses said: “The January employment figures showed a welcome fall in the number of people out of work but we fear the severity of the recession will begin to be evident when the latest figures are released. What the UK economy needs is real action to get more people into work, especially under-25s, who make up a large proportion of those currently unemployed.

“A cut in National Insurance Contributions would encourage small businesses to take on more staff and grow their business. Small firms can help to strengthen economic recovery if they are given a chance to grow and flourish, but they will need a helping hand.”

Notes:

1. The FSB is Britain’s leading business organisation with over 213,000 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 www.fsb.org.uk

2. The FSB-ICM ‘Voice of Small Business’ Panel January Survey was conducted between 27 January and 8 February 2010. The results are based on an online survey carried out by 1,657 members of the FSB-ICM Panel. The study was conducted by Guided Insight and ICM Research

3. The FSB-ICM ‘Voice of Small Business’ Annual Survey 2009 was conducted between 18 September and 30 October 2009. The survey was open to all members and results are based on 9,761 self-completion surveys (online and postal). For further details please visit www.fsb.org.uk

4. Full results split by area:

Media contacts:

Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 7592 8128 / 07917 628998 sophie.kummer@fsb.org.uk
Prue Watson: 020 7592 8121 / 07825 125695 prue.watson@fsb.org.uk
Sara Lee: 020 7592 8113 / 07595 067068 sara.lee@fsb.org.uk