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Small firms demand vouchers from government to pay for Brexit costs

Tom Belger
Finance and policy reporter
Shoppers make their way through the centre of Cambridge. Photo: Chris Radburn/PA Wire

A leading business group is urging the government to give the UK’s small firms vouchers to pay for advice, training and other support to prepare for Brexit.

The Federation of Small Businesses (FSB) says the idea, which has been adopted in Ireland and the Netherlands, would ensure more companies were prepared for the significant upheaval that could follow Britain’s departure from the EU.

Speaking on the day Britain was due to depart – until the UK requested a last-minute delay earlier this month – the chair of the FSB said small companies had been given little support in more than “1,000 days of uncertainty” since the referendum.

The FSB also sounded the alarm over new figures from a survey of more than 1,000 members, suggesting firms were pausing recruitment plans, stopping investment and scaling back export expansion because of the ongoing uncertainty.

READ MORE: BCC chief tells MPs to stop ‘chasing rainbows’ over Brexit

The figures from the first quarter of 2019 show a record-high number of firms reporting falling revenue, and nine in ten not planning to increase staff numbers.

The survey also found export firms’ hopes of expansion in the next three months had plummeted to their lowest point in the nine years since the FSB started collecting the figures.

The FSB’s headline index analysing business confidence has plummeted from a positive balance of +6 a year ago to -6 today, falling for a third quarter in a row. It is the first time the FSB has ever recorded three successive quarters of growing pessimism.

Mike Cherry, national chair of the FSB, said: “Small firms were told that we would be leaving the EU  today with a good understanding beforehand of what the future would hold.

“While many politicians have prioritised machinations, the smaller businesses that make-up 99% of our economy have been left in the dark.” 

READ MORE: Optimism in the City drying up at fastest rate since the crash

He said: “Thousands have had to shell-out for scenario planning. The least the government can do now is follow the example set by Ireland and the Netherlands by providing small firms with vouchers to access the advice, equipment and upskilling they need to future-proof their businesses as trade arrangements change.”

He also suggested making low-interest loans available to small firms to cover costs.

Cherry said businesses were already fearful about April for reasons other than Brexit, with a “triple whammy” of new obligations on digital tax records, higher business rates and higher pension contributions.

The FSB chair is latest in a line of business leaders queuing up to berate politicians over their handling of Brexit.

Dr Adam Marshall, director general of the British Chambers of Commerce (BCC) pleaded with MPs to stop “chasing rainbows” yesterday after a series of rival Brexit plans were voted down in parliament last night.

He accused politicians of spending “three years going round in circles” in a speech at the organisation’s annual conference in London.