FSB calls for government policy change to small firms
The Federation of Small Businesses (FSB) is calling for Government to re-focus its policy for the small firms.
Nearly a third (31%) of small businesses responding to the FSB's 'Voice of Small Business' survey said that reducing National Insurance Contributions payments for the first six months of employment would encourage them to take on more staff, and 11 per cent said extending the NIC holiday scheme would be an incentive.
The survey of more than 1,700 respondents, also showed that insufficient work and uncertainty over contracts (37%), the state of the economy (33%), cash-flow (31%) and access to finance as well as the cost of credit (16%) are preventing them from employing.
According to the survey, ensuring invoices are paid within 20 days would encourage 17 per cent of small businesses to take on staff.
The Government introduced a NIC holiday for start-ups that take on up to 10 employees in 2010, but the FSB believes this does not go far enough. The FSB is urging the Government to extend the holiday to existing firms with up to four members of staff that take on up to three new employees.
It is also calling on the Government to help small businesses employ more apprentices and interns - 29 per cent of respondents said increased support would encourage them to take these on.
John Walker, national chairman, FSB, said: "We have been saying for some time that small businesses would be encouraged to take on staff if NIC were reduced. Small businesses want to employ but have told us that they need incentives to do so. The Government must extend the NIC holiday to existing businesses if small firms are to take on new staff and so help tackle high unemployment.
"Throughout the recession, we all heard the struggles small firms faced as many had to shut up shop because they were being paid late, and couldn't access finance from the banks, leaving their cash-flow in a volatile position. While our members have told us the situation has improved slightly, these same issues are now preventing small firms from taking on staff - crucial if the country's small firms are going to help to secure and promote recovery.
"It is not only imperative that the Government creates an environment for job creation, but that the banks lend to small firms and businesses are paid on time, to give small firms the confidence they need to grow their business and employ."
