Numbers don’t lie. And the numbers confirm what we might already anecdotally know: small businesses have been hit incredibly hard by the pandemic and subsequent energy crisis.
It’s been “a really tough time for small businesses,” explains Martin McTague, the national chair of the Federation of Small Businesses (FSB). “A lot of businesses were seriously in danger of failing [during Covid] because of the exceptional circumstances that were around at the time.”
2020–21 saw the biggest decrease in the small business population since the millennium – of 6.5%. In 2022, it fell another 1.5%, decreasing the population by further 82,000 businesses.
To put this in context, prior to this (ignoring a small blip in 2017) the number of small private sector businesses had only ever increased year-on-year.
This could spell trouble for solving productivity and growth issues in the UK, highlighted Martin in a recent conversation with CMI’s CEO, Ann Francke OBE. “If you’re looking for growth, it isn’t usually the big incumbents that generate that growth. It's the smaller businesses, the fast moving, innovative businesses, the disruptors that do that.”
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