SMEs cautiously optimistic about Burnham, want action on cost of doing business
SME leaders are more optimistic about their future with Andy Burnham as prime minister than under Sir Keir Starmer, but want to see the government take action on reducing costs, according to new research by iwoca, one of Europe’s largest SME lenders.
The Burnham bounce
Nearly two fifths (38%) believe a Burnham-led government will be good for SMEs, with 30% holding a pessimistic view. Interestingly, those who have witnessed the ‘Manchesterism’ model first-hand are even more enthusiastic – over half (51%) of SMEs in the North West have a favourable outlook on the new prime minister.
Reducing business rates is the most popular policy SMEs want to see (39%), suggesting that the Prime Minister’s recent announcement on cutting rates for pubs and clubs is a step in the right direction. 38% of firms are calling for a fall in employer national insurance contributions, with the same percentage wanting the government to reduce the regulatory burden on small employers. Despite the new prime minister’s focus on devolving power and public spending away from London, just 20% of SMEs want to prioritise infrastructure investment outside of the capital.
SMEs say Starmer fell short
The positive view of Andy Burnham stands in contrast to Sir Keir Starmer’s time as prime minister. 47% say his government had a negative approach to SMEs, with just 31% viewing him as a positive influence. Welsh SME leaders have the most pessimistic opinion of Starmer (59%) across Britain, reflecting the declining fall in support for Labour at the most recent Senedd elections.
Over half (51%) say that increasing employer National Insurance Contributions was one of his Government’s policies which had a negative impact on their business, followed by business rates changes (44%) and increases to the national minimum wage (39%). These concerns on cost pressures could explain why the smallest firms (1-10 employees) had the most negative view of Starmer’s premiership (60%).
Return to stability
Above all, SME leaders are looking for the era of political instability in Westminster to end.
More than three times as many SMEs (54%) agree that political instability is now a bigger threat to their business than any single government policy, compared to just 15% who disagree.
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.”