68 ABOUT FSB As the UK’s business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed. FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy and on Instagram @fsb_uk. Small businesses and the self-employed help rural and coastal communities thrive across the United Kingdom. They provide local employment opportunities, drive innovation, and generate economic growth. From small-scale established family-owned businesses to start ups, the rural economy boasts a diverse array of firms. Rural enterprises are small businesses, producers and consumers and power the social life of their communities. Gift shops are a great example of a type of independent business often found in rural areas and villages, but which might not typically be thought of as a “rural business” by decisionmakers, offering visitors and residents alike fantastic examples of local produce, and showcasing the work of regional artists. The rural economy is based on a bedrock of small businesses of all kinds. It’s a common misconception that rural areas are sleepy hamlets with just a handful of residents. In reality, the rural economy is a complex and diverse ecosystem. However, despite the diversity, tenacity and ambition of rural enterprises, the productivity rate in rural areas is in decline, from 89% of the England average in 2001 to 81% in 2020, according to Defra. The Government’s 10-point plan for rural productivity from 2015 has also made little progress, but at FSB we have set out how we think this decline can be reversed in our new report, The Growth Belt: Supporting rural small businesses. Rural small businesses continue to face specific and often disproportionate infrastructural challenges compared to businesses based in urban areas. After decades of promises, poor digital connectivity and inadequate transport infrastructure continue to blight the prospects of small firms such as retailers in rural and coastal areas. It is essential that policymakers recognise this and address the rural productivity gap, to create a more sustainable and resilient economy that benefits everyone, no matter how small or large their rural community is. We are calling on the Government to update the minimum requirements for upload and download broadband speeds, with 32% of rural firms reporting issues with internet reliability, compared to 17% of urban businesses. Rural small businesses should have a central role in determining the shape and future of their communities. Local authorities must consider their role in supporting rural small firms, working with small and micro businesses on tackling the issues that have the most significant impact on their local areas. Recognising rural small businesses as social agents and economic players is vital if we are to see a much-needed boost to productivity in rural communities. The VAT turnover threshold of £85,000 also holds rural businesses back, as many pause trading during the off-season until the new tax year once they have hit the annual limit, slowing down the whole local economy as a result, with less demand and fewer reasons for people to visit. We would like to see the threshold for VAT increased to £100,000, which would unlock more productivity and growth potential. Rural areas hold enormous potential for businesses to thrive and contribute to their local communities and the larger economy, with retail very much part of the mix. To do this, these businesses require sustained support to weather the challenges and investment in essential infrastructure. By nurturing and empowering rural small firms, we can unlock their full potential to drive growth and prosperity for generations ahead. Martin McTague, National Chair of the Federation of Small Businesses (FSB), looks at the benefits of rural businesses GREEN SPACES FSB
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