This Saturday, December 7, is the UK’s first ever Small Business Saturday, and it’s set to be the biggest celebration of small businesses that Britain has ever seen.
In January of this year, Shadow Business Secretary Chuka Umunna was the first to call for a UK version of Small Business Saturday, which has been a success in the US for some years now. In short, people are encouraged to use local shops on what is one of the busiest shopping days of the year.
I think it’s a brilliant initiative and I’ll be supporting it here in Lincoln, where we boast some truly brilliant small, local and independent businesses.
Small businesses make up more than half of our economy and they are the driving force behind future jobs and growth. It’s amazing to think that most new jobs in the next 15 years will be created by businesses which don’t yet exist.
Small Business Saturday is just one small part however of what we can and should be doing to help support small businesses. Government has a huge role to play in this, and sorting out finance is paramount.
Small businesses consistently rank access to finance as their biggest barrier to growth, and 89% of small businesses are locked into the five big banks. Small businesses would benefit from greater competition in banking — new entrants as well as encouraging peer-to-peer lending.
We also need the kind of lasting change that would come from the establishment of a British Investment Bank, along with a network of local and regional business banks with a responsibility to boost lending in their area.
Skills are vital too. Small businesses need to have a ready supply of employees with the right skills and qualifications. We need to dramatically increase the quality and quantity of Level 3 apprentices, develop a gold-standard technical baccalaureate for 16-19 year olds and put the responsibility for skills standards and funding in the hands of business.
However, perhaps the single best and most effective way in which government could help small businesses right now would be to cut business rates. Business rates are set by the Treasury and they’re rising by an average of £2,000 this Parliament. Another rise is due in April 2013, which will cost businesses an average of £430 extra.
The British Retail Consortium estimate that this increase is likely to put 19,670 jobs at risk due to potential shop closures and reduced investment. It is crazy that more than one in ten small businesses now say they spend the same or more on business rates as they do on rent, right at a time when we should be encouraging small businesses to be the engine of growth.
That’s why, earlier this year Labour committed to cutting business rates in 2015 and freezing them in 2016. The funding for this would come from not going ahead with the Government’s planned corporation tax cut for multinationals in 2015, which – if it happened – would actually only benefit under 2% of British business.
The average saving from Labour’s plan to cut and then freeze rates would be around £450 on 1.5 million properties – workshops, start-ups and shops. The Chancellor should give small businesses they support they deserve by adopting this plan in his Autumn Statement on Thursday.