Major business lobby group: Brexit 'damage already done'

Tom Belger
Finance and policy reporter
UK small firms say Brexit 'damage is already done'. Photo: Claire Doherty/Sipa USA

The damage of Brexit uncertainty has “already been done” to Britain’s small firms and they could face an imminent cashflow crisis, according to a leading business lobby group.

The Federation of Small Business (FSB) has set out its policy wishlist for an autumn budget under UK prime minister Boris Johnson to avoid a “bleak winter”, including urgent support for firms hit directly by Brexit.

Mike Cherry, national chairman of the FSB, said: “The damage of Brexit uncertainty has already been done. Small business owners have been left unable to plan, and are finding it increasingly difficult to retain EU clients and staff.

“Direct financial assistance is now urgently needed for those that have been directly affected by the three-year impasse.”

The group is calling for £3,000 vouchers for small exporters that could help them claim back the cost of expert consultancy, market research, trade roadshows and other support linked to preparing for Brexit.

READ MORE: Pound down as UK parliament in turmoil over Brexit deal

He also sounded the alarm about firms’ ability to cope with political and economic upheaval as Britain nears its planned exit date from the EU.

“Cash is always king for small firms. If we hit a serious bout of Brexit-linked turbulence in the months ahead, the banks and HMRC will need to do all they can to support those impacted by cashflow issues,” said Cherry.

The FSB is demanding:

  • Reforms to Britain’s “ludicrous” business rate system, calling the local business property taxes “regressive” and a disincentive to investment in improvements that push up bills.

  • A freeze on fuel duty and the insurance premium tax.

  • A guaranteed 10mbps minimum broadband speed for all small firms by 2021.

  • Protected investment in apprenticeships.

  • Greater national insurance relief for small firms hiring staff as legal minimum wage costs increase.

Cherry added: “We need to see the Chancellor step-up to the mark next month with measures that will reinject optimism into the small business community and enable growth. Otherwise, we’re in for a very bleak winter.”