The Brief: UK Chancellor Jeremy Hunt has proposed measures that will bring relief to enterprises being battered by soaring inflation through a £13.6-billion business rates relief program. He also claimed that the new Transitional Relief scheme will be launched, taking heed of the concerns of business groups, including the Federation of Small Businesses (FSB).
Why It Matters: Hunt’s statements were based on the Office for Budget Responsibility’s (OBR) very gloomy economic forecast. But while he acknowledged the concerns of business groups (something that Kwarteng only made after his mini-Budget), even the FSB’s national chair, Martin McTague, felt that today’s statement needed more “wealth creation” to support the country’s 5.5 million small enterprises, according to Financial Times.
Finanze Business Foresights: The £13.6bn business rates relief program is just the intervention that the business community needs today to partially shield it from soaring inflation for the time being. But we need more than just a relief program to get businesses, especially small and medium enterprises, to get them back on their feet during recession. The FSB’s small business owner confidence survey was down to -35.9 in the third quarter, with 90% of respondents being pressured by energy and wage bills. It also found out that the number of enterprises applying for finance jumped to 13%, which is its third consecutive quarterly increase. Back in May, the FSB had already raised its plea to the government to raise the business rates limit, which Hunt has explicitly addressed today. Still, the impact of the proposed tax hikes will hurt the sector. There's a risk that the relief program may turn into a better-than-nothing package if no government-funded productivity plans are set in place in the coming year.
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