Small firms could hire 1.6m workers with the right support

Written by: Rachel Miller

Date: 18 June 2024

A small business owner in her retail shop

Small business-friendly government policies could help to create more than one and a half million new jobs in the UK, according to a new survey.

The small business vote appears to be a key factor in the next general election - a new survey by Simply Business has found that four in five small business owners say that they would consider voting for a different party if they placed more importance on the needs of small businesses.

The Simply Business findings also indicate that almost 1.6 million jobs could be generated in the UK if the next government helps small business to reduce their running costs. Employer hiring appetite has waned in recent months, with economic headwinds stalling expansion plans. However, SMEs say they would spend more money on growth - including increasing staff headcount, expanding stock and innovating new products - if the government could provide the right conditions.

The findings show that:

  • 42% of small business owners say they could expand their business if the cost of running a business was reduced;
  • 29% say they would hire more staff;
  • 34% say they could focus more on innovation.

If almost a third (29%) of the UK's 5.51 million small business owners were to recruit new staff to their business, it could introduce 1,597,900 new jobs to the labour market.

"I would love to take on new staff and keep improving my stock, but [the] uncertain economic climate, inflation and fluctuating consumer spending make it hard to build any kind of growth strategy. Being self-funded is probably the biggest hurdle. Our signature product sold out at its last release, and we know what we could do to make it even better - but finding the research and development budget has been really difficult. Accessing the necessary cash for growth is hard when the usual routes of local growth hubs, investment or government organisations are not investing." Larnia Ryder, owner of retail brand Ryde Store, Lancashire.

SMEs call for a lower tax burden

According to the poll findings, small businesses are looking for a number of key ways for the incoming government to support them:

  • 98% of small businesses say the government hasn't done enough to reduce their tax burden;
  • 27% say alleviating their tax burden should be a top priority for the next government;
  • 63% want a higher VAT tax threshold;
  • 43% are calling for less red tape around funding and grants;
  • 30% want the government to provide more low-interest loans.

"With the general election coming up, the government should be looking to the backbone of the British economy - small businesses - and keeping individual traders and companies going. I'd love to see some serious commitments to the small business community being made by the candidates." Vyk Jefferson, manager at 5th Avenue Flowers, Newcastle-Upon-Tyne.

Bea Montoya, coo at Simply Business UK, said "Their message is clear: put small businesses at the centre of our economic plan by tackling their challenges head-on. The UK's 5.5 million small businesses are an essential part of our collective economic stability. Their importance - and the power of their votes - cannot be underestimated."

Written by Rachel Miller.

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