Small business confidence in East Anglia takes a hit amid political turmoil
- Credit: Archant
Small business confidence in East Anglia has fallen for the first time since the EU referendum, the latest Small Business Index from the Federation of Small Businesses shows.
The net confidence score slumped from +26 in the first quarter of the year to +13 in the second quarter, putting East Anglia less upbeat than the East Midlands (+35), Wales (+31) and London (+25), but more confident than Scotland (-4) and the North West (+9).
The domestic economy was the most commonly cited barrier to growth among the region's small businesses, with consumer demand, labour costs and the tax burden also highlighted. Meanwhile, operating costs are at their highest level in four years.
Regional chair Salena Dawson said: 'Small businesses were feeling more pessimistic even before the general election was called. Now, alongside increasing inflationary pressure, a business rates revaluation and rising labour costs, they have a whole new wave of political uncertainty to contend with.'
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Ms Dawson also repeated the FSB's calls for a hike in national insurance contributions for the self-employed – shelved in March – to be scrapped for good.
'These strivers are the engine of our economy here in East Anglia, and in this unforgiving climate, the last thing they need is increased cost. This would act as a disincentive to business creation.
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'Many small firms are still reeling from the business rates revaluation that took effect in April. The £300m hardship fund announced at the spring budget to help those worst affected offered a glimmer of hope, but is yet to materialise. With the election out of the way, there's absolutely no excuse for local authority debt collectors chasing small businesses for incorrect, over-inflated bills without the emergency relief applied. The communities secretary needs to make distribution of this fund his top priority.'
Small firms operating in the information and communication and manufacturing industries are some of the most confident this quarter. Meanwhile, consumer facing businesses, such as those in the arts and retail sectors, have seen sharp drops in optimism, said Ms Dawson.
'Consumer-facing businesses are really starting to feel the squeeze. Many small firms that operate in the retail and hospitality sectors across Norfolk and Suffolk depend on EU27 workers. Ensuring these vital employees have the right to remain needs to be a first port of call once Brexit talks launch.
'For decades we've heard governments discuss the need to create a balanced economy. It's time for meaningful action. Too many small businesses are being held back by derisory investment in infrastructure, connectivity and skills. We look forward to working with the new administration on an ambitious industrial strategy which prioritises productivity growth across all regions of the UK.'
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