Budget is Chancellor’s chance to ‘turn words into action’

With less than one month to go until Chancellor Jeremy Hunt unveils his 2023 Spring Budget, business group the Federation of Small Businesses (FSB) has urged Mr Hunt to ‘turn his words into action’ and ‘be bold and show grip’.

In its Budget submission, the FSB has called for the Chancellor to make a plethora of changes to a range of measures, including business rates, Research and Development (R&D) and green technology.

 

Scrapping business rates

The FSB has urged the Chancellor to scrap business rates for firms in properties in England with a rateable value of up to £25,000 a year. It recommends this be paid for by a small increase to the multiplier on large properties.

Increasing employers’ Employment Allowance in line with the National Living Wage (NLW) and combating the UK’s late payment culture are among some of the other measures the FSB recommended to help small businesses.

 

Improving the UK labour market

The business group has outlined 15 separate recommendations in regard to improving the UK’s labour market participation rates. It has advocated a new job scheme for individuals with health problems that have prevented them from working for a long time, alongside additional support for over-50s employment.

 

Giving small firms access to energy efficiency technology

Many UK business groups have urged the government to support firms in being able to make use of green technology. In its Budget submission, the FSB called for the creation of a flagship ‘Help to Green’ initiative, which would help ensure small and medium-sized enterprises (SMEs) can access energy efficiency technology.

 

Supercharging competitiveness in green markets

The Confederation of British Industry (CBI) also used its Budget submission to urge the Chancellor to ‘supercharge UK competitiveness in green markets’. The CBI suggested the creation of an investment allowance under the Electricity Generator Levy, which would enable the UK to ‘regain lost ground’ in developing cleaner and greener energy.

Louise Hellem, Director of Economic Policy at the CBI, commented:

CBI research has found that across a range of high-potential green technologies, the UK’s market share has declined in the green opportunities we should be capturing, equivalent to £4.3 billion in total projected lost value by 2030.

 

Calls for a U-turn on slashing R&D tax relief

The FSB also advised the government to change its course' on its plans to slash Research and Development (R&D) tax support for SMEs. Research carried out by the FSB showed that one in five small firms which invested in R&D in the last three years believe slashing tax relief will reduce their viability. 64% of small businesses which received the tax relief are now less likely to invest in R&D, according to the FSB.

Martin McTague, National Chair of the FSB, said:

The UK risks being left in an innovation wasteland if Jeremy Hunt does not take control of Treasury innovation policy and restore the single most successful industrial policy of the last decade.

Our findings are a reminder to the Chancellor that the government still has time to do the right thing – delay or scrap the plan to cut R&D tax credits for small businesses from April.

 

Spring Budget

The Chancellor will present the 2023 Spring Budget on 15 March, alongside an economic forecast from the Office for Budget Responsibility (OBR). Mercia’s experts will be watching and will provide detailed analysis of the day’s announcements. Keep your clients up to date with our Budget products.