Confidence of SMEs in North and Scotland drops

Confidence among the UK’s small businesses has plummeted, a survey showed yesterday, with firms in the North and Scottish businesses the least confident in the face of a global economic slowdown and public sector austerity.

The Federation of Small Businesses(FSB) first-quarter survey showed the first decline in job creation by small firms nationwide since mid-2013.

UK chancellor George Osborne gave tax breaks to small businesses in Wednesday’s budget after downgrading growth forecasts, but the outlook is clouded by an upcoming vote on whether Britain should remain a member of the EU membership.

A separate FSB survey earlier this month found 42% of 4,000 members were undecided about how they would vote on the EU, and more than half felt they were not well-enough informed.

Optimism has fallen year-on-year this quarter in every part of the UK, with the largest declines in the East of England and London.

One in four small firms cited tax and regulatory burdens as a restraining factor, and exports had their weakest performance since 2012.

In Northern Ireland, where confidence ratings are negative, the report highlighted the region’s dependence on the public sector, which is cutting jobs and keeping a lid on pay.

It said the decision last month by planemaker Bombardier to cut over 1,000 Belfast jobs was also likely to weigh on confidence and hurt small firms in the supply chain.