A survey, “Voice of Small Business,” carried out jointly by the Federation of Small Businesses (FSB) and ICM Research in January, shows that small businesses are keen to grow but need the right conditions in order to employ more people to help strengthen economic recovery.

Of the small businesses surveyed, 58% said that UK taxes have prevented them from taking on more staff.

Small businesses in the South East feel particularly strongly, with 64% saying taxes have a negative impact, closely followed by the North West at 60% and London at 59%.

Concerned that the temporary boost to employment figures provided by the Christmas period is coming to an end, the FSB is stepping up its call to government to freeze National Insurance Contributions and provide a National Insurance rebate for small businesses with fewer than 50 staff that take on more employees during 2010-11.

In late 2009, a similar survey showed that 19% of small businesses were planning take on new staff over the following 12 months in order to achieve business objectives, with London (27%), Northern Ireland (25%) and the North East (23%) the most likely to do so.

John Wright, National Chairman of the FSB, stated that:

"A cut in National Insurance Contributions would encourage small businesses to take on more staff and grow their business. Small firms can help to strengthen economic recovery if they are given a chance to grow and flourish, but they will need a helping hand."

The survey findings follow the release by the FSB earlier in February of its Election 2010 Campaign Manifesto, titled “Small Businesses – Big Vote.”

The manifesto claims that 44% of FSB members argue that a cut in payroll taxes would help them to take on more staff.

The FSB manifesto also calls for a cut in VAT to 5% for construction work, claiming that for every GBP1 invested in construction, GBP2.84 is realized in total economic activity. The Federation believes that cutting the VAT rate for the construction industry would kick-start the sector by generating more building activity and increasing employment.