Britain’s small business owners are more optimistic about their prospects under Prime Minister Andy Burnham than they were during Sir Keir Starmer’s premiership, although many say confidence will depend on swift action to reduce the cost of doing business.
Research from SME lender iwoca found that 38 per cent of business leaders believe a Burnham-led government will be good for small and medium-sized enterprises, compared with 30 per cent who hold a pessimistic view.
Support is strongest in the North West, where Mr Burnham served as Mayor of Greater Manchester. More than half of SME leaders in the region said they expected his government to have a positive impact on smaller businesses, suggesting his record in regional economic development has translated into higher expectations nationally.
Despite the positive sentiment, the survey indicates that business owners remain focused on immediate financial pressures rather than broader economic reforms.
Reducing business rates emerged as the most popular policy priority, backed by 39 per cent of respondents, while 38 per cent called for lower employer National Insurance contributions and the same proportion urged ministers to reduce the regulatory burden facing smaller employers.
The findings suggest that Mr Burnham’s recent pledge to cut business rates for pubs and clubs has resonated with parts of the SME community, but businesses are looking for wider measures to improve profitability and encourage investment.
The contrast with the previous administration is striking. Almost half of respondents said Sir Keir Starmer’s government had taken a negative approach towards SMEs, while only 31 per cent viewed it positively.
Higher employer National Insurance contributions were identified as the policy that had caused the greatest damage to smaller firms, cited by 51 per cent of respondents. Changes to business rates and increases in the National Minimum Wage were also highlighted as significant cost pressures.
Perhaps the clearest message for the new government is that businesses are seeking greater political certainty.
More than half of SME leaders said instability in Westminster now poses a greater threat to their business than any individual government policy, underlining the importance of predictable economic decision-making alongside targeted support for the UK’s small business sector.
Christoph Rieche, CEO and co-founder of iwoca, said: “SMEs want Andy Burnham to succeed.
The Prime Minister has made clear he wants to drive economic growth, and small businesses must be at the heart of that ambition as they are the backbone of the economy. Growth typically requires investment, and the outcome of investments are uncertain and risky.
“Business owners carry the lion’s share of the entrepreneurial risk. The Prime Minister should acknowledge that an ever-increasing tax load reduces the willingness to shoulder these risks and therefore reduces the potential for economic growth.”
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