Britain’s small businesses are entering the Autumn Budget with a clear demand for the government: cut the cost of doing business before uncertainty chokes off investment and growth.
The latest SME Confidence Tracker from Bibby Financial Services (BFS) found that reducing companies’ financial burden was the top priority for small and medium-sized enterprises ahead of the first Budget from Prime Minister Andy Burnham and Chancellor John Healey.
Their wish list reflects mounting pressure on businesses already navigating higher operating costs and an uncertain economic outlook. SMEs want corporation tax reduced, or at least no further increases, alongside a freeze on capital gains tax and a reversal of the rise in employers’ National Insurance contributions.
They also want the government’s business-rates relief for retail, hospitality and leisure companies extended to other sectors, arguing that the cost pressures facing high-street businesses are not confined to a handful of industries.
The uncertainty is already affecting decisions. According to BFS, 54 per cent of SMEs are postponing major investment until after the Budget, leaving expansion plans on hold while companies wait for greater clarity over the tax and regulatory environment.
That hesitation challenges ministers seeking to show that Labour’s pro-business agenda can translate into stronger private-sector investment.
Confidence in the government’s plans remains weak: only one in five UK SMEs surveyed by BFS believe the Autumn Budget will benefit their businesses.
The figures underline the stakes for the Chancellor. For smaller companies, the Budget is not simply a test of fiscal policy, but a signal of whether Britain offers the stability and incentives needed to invest, hire and grow. If relief fails to materialise, businesses already reluctant to commit capital may make caution the default strategy.
Derek Ryan, CEO for North West Europe at Bibby Financial Services, said: “Prime Minister Andy Burnham has said he wants the UK to be the most ‘pro-business country in the world’. If he’s serious, he must lower the cost of operating.
“That means cutting corporation tax, or at the very least guaranteeing it won’t rise again and reversing the increase in employer National Insurance.
“Extending business rates relief beyond retail, hospitality and leisure would also ease pressure on cashflow, free up working capital and remove a major barrier to growth.
“SMEs have heard pro-business promises before and been let down. Now they are waiting to see whether this Government will deliver. More than half of SMEs are holding back major investment until after the Budget, unable to plan for growth without knowing what their tax bill will look like.
“That’s money not being spent on new equipment, new hires, and new products, which is exactly the activity this Government says it wants to unlock. SMEs don’t lack ambition. What’s holding them back is the weight of the current tax burden. Ease that burden, give them stability, and they’ll invest.”
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