- 46% of smaller SMEs say they’re not confident that the government will drive a ‘pro-business’ agenda going forward
- Smaller SMEs are half as likely to be excited about the year ahead compared to medium sized ones – 17% vs 39%
- In contrast, over the past 12 months, confidence among medium-sized business has increased
With the Autumn Budget approaching, new research from Simply Asset Finance reveals that smaller businesses are increasingly worried about the pro-business credentials of the Government.
Almost half (46%) of smaller SMEs say they’re not confident that the Government will drive a ‘pro-business’ agenda compared to only 22% of medium sized businesses. Notably, the research reveals that much of the goodwill that had been granted to the new Government early in its tenure has ebbed away. In the run-up to the 2024 budget, this figure sat at 26% among smaller businesses.
On the flip side, those bigger medium sized businesses are much more confident that the Government will drive a pro-business agenda going forward – and crucially, their confidence has not just been maintained since before the 2024 budget, but it has in fact increased from 58% to around two in three (65%).
All this culminates in smaller businesses being less than half as likely to be excited about the year ahead than more medium sized ones – 17% vs 39%.
In order to develop meaningful, impactful, and welcome policy, it is important to first understand the pressures these smaller businesses are facing. Twelve months ago, in the run-up to the 2024 budget, the key threats to smaller businesses were high interest rates (42%), a stagnant UK economy (37%), and high levels of inflation costs (34%).
Since then there has been a shake-up. Now, almost half of smaller businesses (48%) identify a stagnant UK economy as a key threat to the business. Furthermore, 45% cite high levels of inflation and 38% high interest rates.
Crucially, there are a number of clear areas that, if properly addressed, could be transformative for smaller businesses. And the shift that we have seen over the last 12 months revealing the areas which smaller businesses view as a priority is also hugely revealing.
Now, just under half (45%) of smaller businesses are eager for more tax incentives for innovation/ investment – a figure up from 36% in the run up to the budget last year. And there has been an even bigger rise in those calling for the government to address prohibitively high energy costs. While this time last year the figure among smaller SMEs was 26%, it has now rocketed to 44%.
Mike Randall, CEO, Simply Asset Finance comments: “While medium businesses are relatively bullish, smaller businesses are sceptical about the Government’s pro-business agenda. But the Autumn Budget provides a perfect opportunity for the relationship to get back on track. Crucially, there are a number of fundamental issues that, properly addressed, would enable SMEs to unleash their growth potential.
“Businesses are being really squeezed by high costs, and it is important that we see some movement from the Chancellor to mitigate that. But with growth the central focus, it is substantively addressing the hurdles to investment that would reap the most rewards in the short, medium, and longer term. This includes better incentives, but also delivering greater certainty to allow for big financial commitments to be made. Businesses of all shapes and sizes remain eager to grow but to do so, the Government needs to ensure that the conditions are right for them to thrive.”