Business development · 25 November 2020

Chancellor’s spending review fails small businesses

Ahead of the Chancellor’s spending review, small business owners and advisors had a mile-long wish list to bolster SME support during the ongoing pandemic.

Although the Covid-19 pandemic has forced Chancellor Rishi Sunak to postpone both his planned autumn budget and the announcement of plans for public spending until the middle of the decade, today (25 November) he outlined what the government intends to spend for the next financial year 2021-22.

Colliers International’s head of business rates John Webber shared a five-point wish list for what he believes is crucial for the Chancellor to address in this announcement. He said it is essential that Sunak does not ignore business rates, which contribute £26 billion net to the economy.

However, the announcement pledged support to fight coronavirus, boost local infrastructure and increase employment rates by providing support for reskilling and upskilling people. 

“The Chancellor (had) a golden opportunity today to bring some relief to businesses across the country who are struggling as a result of the unprecedented circumstances we have seen in 2020,” Webber said ahead of the announcement. “We urge that he does not ignore business rates and that he reassures businesses that they will not be faced with either untenable bills next Spring or court action now. Failure to do anything may mean the bloodbath we are currently seeing in the retail sector could well spill across other sectors, leading to more closures and job losses across the board.”

And that’s where we are right now. A blood bath.

Commenting on today’s Spending Review, Nigel Morris, employment tax director at MHA MacIntyre Hudson, says Sunak failed to deliver for businesses.

“More help for businesses is essential to protect our economy, yet we saw no major support made available for them, for example a cut in employers’ national insurance payments, or restoration of the £1,000 Job Retention Bonus for keeping on furloughed staff. The increase in the National Living Wage is great news for employees, as is its extended age range, which means employees now qualify from age 23, but this puts more pressure on stretched employers to fund wages and associated national insurance costs.”

“If the £3bn investment in the Restart Scheme delivers on its aim to help one million people, it will really help soften the blow of job losses resulting from the pandemic. Rishi Sunak’s focus on protecting lives and livelihoods is much welcome, but we need the right balance between support for individuals and the companies that employ them.”

Read more: Spending Review: Chancellor committed to infrastructure and upskilling.

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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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