The Federation of Small Businesses (FSB) announced that small businesses were discharging career employees without hiring new employees. The FSB conducts a quarterly survey called "Voice of Small Business." The survey is administered by the Centre for Economics and Business Research (CEBR).
The survey found there was a slight increase in small business recruitment during the second quarter. The third quarter results showed more small firms were terminating jobs in the future. CBER's managing economist, Charles Davis, attributed this trend to lack of faith in the economic outlook. The private businesses in general were creating some jobs, but the small businesses and the public sector employers are downsizing their payrolls.
Mr. Davis cited the small firms drop in confidence about the economy as the reason for the shift in hiring plans. The second quarter's confidence index was 0.3 percent positive while the third quarter's index was a negative 9.3 percent.
The FSB called on Parliament to make changes to offset the effects of rising costs and falling revenues. Among their recommendations was a call for a holiday from the national insurance contributions and a cut in the value-added tax (VAT). The VAT cut should increase consumer spending while the tax holiday would help offset losses from the rising costs.
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