Small firms lacking confidence, report shows

Date: 18th October 2011

Small businesses around the UK are suffering from a crisis of confidence, according to anew report.

The study, published by the Federation of Small Businesses (FSB), showed that rising costs are "piling on the pressure" leading to a "slump" in confidence.

Figures from the study showed that the organisation's Voice of Small Business Index dropped by 9.6 points to -9.3.

In order to reverse the trend, the FSB has called on the coalition government to introduce a targeted VAT cut and a National Insurance Contribution holiday.

John Walker, national chairman of the organisation, said it is little wonder that firms are lacking confidence in the current economic climate.

"As businesses come to terms with the double whammy of falling revenues and rising costs, it is no wonder that they're losing confidence, and unfortunately, as their overheads increase one way to control it is to lay off staff," he commented.

"We urge the chancellor to look closely at our NICs holiday proposals and bring this forward in his Autumn Statement. We fear that without it, the recovery will falter once more."