FSB urge Chancellor to ease pressures on businesses ahead of Spring Statement
Cutting fuel duty, assisting micro-businesses with energy bills and increasing employment allowance to £5,000 are among the measures called for by the Federation of Small Businesses (FSB) ahead of the Chancellor’s Spring Statement.
FSB National Chair Martin McTague said such measures were key for ensuring small businesses “keep their heads above water”.
Rishi Sunak will deliver his statement to the House of Commons on Wednesday, with the government increasingly under pressure to deal with the escalating cost of living prices which has seen energy bills, petrol prices and grocery goods soar to record prices amid spiralling inflation.
McTague warned without more support – the future of hundreds of thousands of businesses was in jeopardy, including the millions that work for them – which would have wider societal ramifications.
He explained: “Unless the government intervenes, soaring fuel and utility bills will spell the end for many of the quarter of a million firms that say they are on the brink of collapse. When small businesses go under, that sends shockwaves through local communities in the form of lost jobs, reduced investment and damaged consumer confidence.”
Noting that businesses would have little choice but to raise consumer prices to cover soaring costs, the FSB chair called on Sunak to deliver on his pledge to create a low-tax economy and new culture of enterprise.
McTague said: “He can’t control the wholesale cost of gas and oil, but he can control tax policy.”
The budget last October paved the way for highest tax burden since the 1950s – rising to 36.2 per cent of GDP in 2026/27, according to the Office for Budget Responsibility.
Small businesses bear brunt of spiralling costs
Alongside its calls for business reforms, FSB has revealed electricity and gas bills for London-based small businesses have nearly trebled over the past year.
It has calculated combined utility bills for commercial premises between February 2021 and February 2022 have spiked from £6,069.80 to 16,405.25.
Electricity bills have increased from £4,724.73 to £11,589.89 – a 145 per cent spike – while gas bills have skyrocketed from £1,345.07 to £4,815.36, a whopping 258 per cent boom in prices.
This follows record prices at the pumps, which have broken records for eight days in a row and have been historically high for the past five months.
Average prices at UK forecourts for unleaded petrol have soared to 167.03p per litre, according to RAC Fuel Watch data.
Meanwhile wholesale costs spiked to £8 per therm earlier this month – and remain historically high at £2.68.
For context, prices were 48p per therm this time last year.
This follows data from Squeaky last month, which revealed energy bills for the UK’s commercial sector will jump nearly £5bn this year.
While households are protected by the consumer price cap – currently set at £1,277 per year and set to rise to £1,971 – businesses are more exposed to elevated gas prices.
FSB’s analysis is based on changes in prices from two of the big six energy suppliers over the 12-month window for a small firm in London with a commercial premises using 30,000kWh.
The data does not reflect March’s even more extreme price fluctuations following Russia’s invasion of Ukraine.