The Federation of Small Businesses (FSB) reported yesterday that its confidence index plunged to -9.3 points in the three months to September, down from +0.3 per cent in the previous quarter.
And a positive balance of six per cent of surveyed firms said they will lay off staff in the next three months – the highest balance recorded since the survey began in the first quarter of 2010.
“It is the first time since we started the index that we have seen more people believe that they’re going to lay off staff than take them on,” explained FSB chairman John Walker. “This has to show the government that a more robust plan for growth is needed.”
The FSB is calling on the coalition to extend its “holiday” on National Insurance Contributions (NIC) to “existing businesses across the UK that have fewer than four employees and that employ up to the three more staff”.
The tax holiday currently applies only to new start-up companies, yet has only attracted 7,000 businesses to sign up, the FSB said.
The government should also follow the lead of some other EU countries in cutting VAT on tourism and construction, the FSB argued.