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Small businesses can’t cut prices anymore: FSB

The Federation of Small Businesses has said the latest plan from the government asking small businesses to cut product prices is a “slap in the face”.

Small businesses can’t cut prices anymore: FSB
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In a speech this week, cost-of-living tsar, David Buttress, proposed a taxpayer-funded ad campaign urging small businesses to cut their prices to support Britains struggling with cost-of-living pressures to gain “kudos” with their customers.

FSB national chair Martin McTague said the proposition was unrealistic and small-business owners no longer have the capacity to soak up additional costs without passing them on.

“It’s a slap in the face for government to spend the extra tax it is raising from businesses on state-run marketing campaigns – doubtless focused on big businesses with corporate offers that can now be rebranded as helping the cost of living crisis, and so boost their sales,” he said.

The FSB executive called on the government to do more to help both firms and consumers, including reducing VAT rates.

Mr McTague argued there was much more the government could do to help, such as reducing VAT rates to lift more small firms out of business rates, rather than just a marketing campaign using taxpayer resources to put government branding in shop windows.

The government is set to launch the campaign in July and Mr Buttress said he is working in “partnership with the private sector to identify, develop and promote new and existing business-led initiatives that support people by encouraging businesses to do more to highlight discounted prices or product offers.”

The CBI, which hosted Mr Buttress’ speech, said it was vital the government continues to focus on building business confidence to help firms reduce the knock-on effects to consumers.

Business will continue to work in partnership with the government to try and mitigate the impact of rising costs across the board, a spokesman added.

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