Confidence within UK small businesses has fallen to its lowest level since 2013 according to the Federation of Small Businesses (FSB) Small Business Index.
According to the analysis of business sentiment during the first quarter of the year, small businesses from every region are lacking in confidence – the most significant drop hovers over London and the east of England. However, businesses in Scotland and Northern Ireland have the darkest outlook as they are both in a ‘negative confidence territory.’
What is expected?
Experts believe that SMEs will be lifted after the budget announcement which took place last Wednesday but, the fear weighing over leaving the EU, the increase in the National Living Wage, the new quarterly tax system and the pension’s auto-enrolment scheme is still causing worry and a lack of confidence in them.
Vice Chairman at FSB, Sandra Dexter has commented;
“Small business confidence has clearly faltered, which is why the welcome small business focus in the Budget is so important.
“We need a renewed push for growth and productivity, with policy makers delivering a sustained package of support for ambitious small firms.”
What are Scotland’s fears?
The report corresponded with the FSB conference which took place in Glasgow on Friday the 18th of March. Nicola Sturgeon, Scotland’s Frist Minister was expected to deal with over 1,200 delegates. Nicola was accompanied by John McDonnell, the Labour Shadow Chancellor, and Ruth Davidson the Leader of the Scottish Conservatives. The agenda included the barriers of why businesses are not growing in Scotland. The top 5 included;
1. The strength of the domestic economy
2. The lack of consumer demands
3. A skills shortage of staff
4. The increases in wages – including the National Minimum Wage increase
5. The inconvenience and complexity of the new taxing system
Why is the public sector reliance harming Northern Ireland?
As Northern Ireland experiences a poor confidence rating the index has pointed out the region’s reliance on the public sector which has resulted in less jobs and a restricted pay.
Sandra Dexter added;
“The ongoing improvements to small business finance demonstrates how a sustained and focused approach to supporting smaller firms can really pay off.
“We now want to see a similar focus and long-term drive to simplify the tax system, building on positive announcements in the Budget and the work of the Office for tax simplification.
“By doing this, we can boost small business confidence levels and support long-term sustainable growth.”