Confidence among small businesses and mid-caps has “skyrocketed” over the past three months, and firms are now demanding changes to their employers’ national insurance contributions (NIC) to further boost economic growth.
The companies want to receive NIC reductions or even rebates for businesses that take on staff or push into export markets, a key tenet of the Westminster government’s economic recovery plan.
Businesses also want to see the tax system simplified by scrapping various relief schemes in return for a lower corporate rate.
Tim Ward, chief executive at the Quoted Companies Alliance (QCA), said: “We are seeing a new energy in the small and mid-cap sector which has the potential to be converted into real jobs.
“The QCA supports simplifying the tax system and rewarding job creation.”
Neil McGill, a director at accountancy firm BDO, which compiled the report, added: “Sentiment has skyrocketed and small and mid-cap companies now need the right conditions to grow – NIC reductions and rebates would facilitate that growth, both here and abroad.”
Ward also called for more support for small businesses and mid-caps from investors in the City. He said: “The City favours investment in lower-risk, cash generative companies.
“This rules out pre-revenue small and mid-cap companies, such as many in the hi-tech sector, that are clearly gearing-up to grow.
“The City needs to recognise and support those companies that are post-seed funding and pre-positive cash generation. They are a key potential contributor to our future growth.”
Last week, the British Chambers of Commerce and the CBI each issued their wishlists for the autumn statement on 5 December, which included a “root-and-branch” review of the business rates system and investment in infrastructure in the energy sector. News of the report from BDO and the QCA comes as a separate study also published today shows that job insecurity is growing in the Britain’s public sector but not in the private sector.
The National Institute of Economic & Social Research (Niesr) found that only 47 per cent of public sector workers felt their jobs were secure in 2011, compared with 66 per cent in 2004, before the 2008 financial crisis and ensuing economic downturn struck.
In the private sector, 65 per cent of respondents felt their jobs were safe in 2011, down from 68 per cent in 2004.
Alex Bryson, principal research fellow at Niesr and one of the report’s authors, said: “In our survey, the biggest difference in working conditions in recent years relates to job security – perceptions of job security have declined markedly in the public sector since the mid-2000s.
“The squeeze on public finances means it is likely that there will continue to be pressure on working conditions in the public sector for some time to come.”
Almost half of public sector employees said that their pay had recently been frozen or cut, compared with 26 per cent in the private sector, Niesr’s Workplace Employment Relations Study found.