Government’s Double‑Edged Sword: Households Get a Lift, Small Businesses Feel the Pain
Short headline: With the Bank of England nudging the base rate up to 0.5% and the Treasury rolling out support for energy‑hardened households, the smallest firms are left clutching at straws.
Why the FSB Chair is Noticing the Fine Print
- First, the Chancellor’s “energy bill relief” is invisible to most small businesses.
- Second, the rate hike means higher debt repayments for the survivors of the new “push‑pay” era.
Mike Cherry, FSB National Chair: “They’re getting the word about households, but we’re left out—no supportive double‑check for the ones who barely make ends meet.”
A Call for Business‑Rate Rebate
It’s the classic “door‑in‑the‐face” of economic policy. The government gives a household rebate, then steps back when it comes to business rates. Those little cafés, corner shops, and local restaurants have been battling energy price hikes for months without any support.
Cherry urges local councils to shift gears: “Local authorities should listen to the ones that feed the community, not just the money‑ite newcomers.”
Levelling‑Up 2.0? Or Levelling‑Away?
One day after the levelling‑up agenda was announced, small businesses felt the chill. The gist? Local councils need more power to grant targeted help for these “stepping‑stones” of the economy.
The Rate Rise: A New Storm for Debt‑Heavy Companies
- Personal and corporate loans that vary with the rate now have higher costs.
- Earnings‑based “bounce‑back” loans remain fixed, but “coronavirus interruption” loans jump to the wall.
It’s a heavy blow when you’re already looking up at the top of a utility bill ladder.
What the Government Could Do
To keep the small firms afloat, consider Expanding “Pay As You Grow” to cover CBILS and bounce‑backs. Another idea: transform emergency loans into employee equity stakes—think of it as letting the crew share a slice of the pie.
Why Now is the Time
More than a nuisance—it’s a ticking time bomb. The upcoming National Insurance contribution hike and sharper dividend tax will catch everyone, regardless of profits. If we want to keep the UK’s job‑creating engines running, the change must happen sooner, not later.
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