UK small businesses are increasingly feeling the impact of rising costs but are prepared to take the economic hit of the global effort to stop the war in Ukraine, a new survey by Newcastle tech giant Sage has revealed.
The survey of more than 1,000 SMEs questioned business owners on a range of subjects at a time when the rising ‘cost of doing business’ is increasingly coming to the fore.
The poll found that 71% of SMEs say that their business will be impacted in some way by the recent rise in the price of oil and gas on world markets, while the number of businesses confident of success has fallen eight percentage points since last month.
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More than a third of businesses (35%) said the global crisis could significantly impact their ability to invest in their business in the next 12 months and a similar proportion are looking to pass on increasing costs to their customers.
But the poll also found business owners were overwhelmingly willing to accept a hit to their operations for the greater global good. 87% said an economic hit to their business was a price worth paying to support the people of Ukraine and 49% would consider hiring a refugee from Ukraine. 82% of small business owners support tougher sanctions on the Russian economy, and 80% are organising some activity to support the people of Ukraine.
The picture of growing nervousness in the small business community comes just a few days before Rishi Sunak’s Spring Statement, with increasing pressure on the Chancellor to protect companies from an array growing costs.
Suren Thiru, head of economics at the British Chambers of Commerce, said: “The focus should be on using next week’s Spring Statement to tackle the escalating cost of doing business crisis by delaying the national insurance rise and introducing a temporary energy price cap for small businesses.
“This would give firms the headroom to keep a lid on prices, protect jobs and make investment that is so vital to sustaining our economic prospects.”
And Martin McTague, the North East-based national chair of the Federation of Small Businesses, said: “We urgently need to see the Chancellor ease the pressure on the five and a half million small firms and sole traders on which our recovery will depend.”
Speaking at the Conservatives’ spring forum at the end of last week, Mr Sunak hinted at some support measures to counter the rising cost of living, but sought to dampen any major expecations.
He said: “I can’t solve every problem, no Government can solve every problem, particularly when you are grappling with global inflationary forces – they are somewhat out of my control.
“But as you saw a month or so ago when we announced the very significant intervention to help people meet some of the additional costs of energy bills, where we can make a difference, of course I can – I’m always going to do that, we’ve done it over the last two years.
“So, we will have an update on the situation and a little bit of a look forward to where we are heading.”
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