The Autumn Statement has piled more pressure on the UK’s 5.5m small businesses, their employees and customers, according to the Federation of Small Businesses (FSB).
Chancellor Jeremy Hunt’s measures were “high on stealth-creation and low on wealth-creation”, FSB national chair of Martin McTague said.
“While tackling inflation is essential, so are measures to create conditions for prosperity, growth and support enterprise. Today is a missed opportunity to avoid further economic slowdown,” he said.
Small businesses, which account for more than 16m jobs in the UK, were already facing an acute cost of doing business crisis through soaring costs, falling revenues, shrinking availability of affordable finance, and a rise in invoices being paid late.
“On top of all that, they now face even higher taxes, cuts to innovation, and a recipe for a longer and deeper recession,” Mr McTague added.
“On top of all that, they now face even higher taxes, cuts to innovation, and a recipe for a longer and deeper recession.”
The CBI praised the Chancellor for “delivering stability and protecting the most vulnerable”.
It welcomed the freeze in business rates and extra support for those facing higher bills.
Additionally, it said that staying the course on R&D spending and major infrastructure would give a boost to communities and the country.
However, it also warned the government that many businesses would “think there’s more to be done on growth”.
It stated that stabilising the public finances “inevitably means difficult decisions have to be taken”, and that businesses will consider a freeze in the National Insurance contribution (NIC) thresholds and additional windfall taxes as “the sharpest stings in the tail”.
CBI chief economist Rain Newton-Smith said: “The Autumn Statement lays down an important marker for the direction of the country. Business will work with government to turn [the] ambitions into a serious plan for growth that can lift us all out of the current crisis.”
The Institute of Directors welcomed the commitment to stability, which it said was the basic foundation for growth.
In particular it said there was now evidence of good partnership working with the Office of Budget Responsibility (OBR) and a re-commitment to the principle of fiscal rules, including to reduce the stock of debt in a rolling five-year period.
