The Chancellor’s first budget is fast approaching and will be the first real steer of what the new Government has in store. SMEs will be waiting with bated breath.
It is a well-known fact that London is home to over a quarter of all UK jobs, and a major driver of the UK economy. What is often overlooked, however, is that 47% of that London workforce is employed by SMEs. From flower delivery companies to the next big fintech, they are a bedrock of innovation, and an engine for growth across our Capital.
SMEs will already form part of the Mayor’s upcoming London Growth Plan – an action-focused plan which will set out how London will drive sustainable and inclusive economic growth – due to be published later this year. But positioning these companies for success is vital to support future economic growth across not only London, but the whole of the UK, and should therefore be a key focus for the current Government.
Part of what makes SMEs so valuable is the innovation that they bring. But to keep driving this innovation, they need greater support. Specifically, grants which can be put towards more R&D, simpler and more accessible funding options, investment programmes like the Growth Guarantee Scheme which provides government-backed loans to SMEs, and tax relief. As it stands, SMEs pay the same level of contributions as big corporates but if we are expecting them to support the future growth of the economy, we should be looking at the bigger picture and doing more to help them grow today. SMEs should not bear the brunt of balancing the country’s books.
Another important factor for growing SMEs is a good supply of talent. At a time when all UK businesses are facing challenges due to skills shortages, increased government investment in apprenticeship and skills development programs could be extremely valuable as SMEs look to source skilled affordable employees.
Business rates reform is a topic that has come up time and time again, and was part of the government’s key pledges to business in its manifesto during the election campaign. It was raised once again by the Chancellor at the Labour Party Conference, reiterating plans to overhaul the system, giving the business community some confidence that change could be on the horizon.
Although small business relief is already available to some SMEs (for example, around 50% of Workspace customers are currently entitled to it), raising the threshold would support even more – particularly in London where businesses are already tackling higher living costs as they try and grow – and total reform could be a game changer.
SMEs are the businesses of the future, and with such responsibility on their shoulders and such high expectations of how they can support growth across London, and the UK, it seems only fair, and logical, to support and nurture them.
When the Government lays out its first budget on 30th October, it is unlikely, given the ongoing speculative reporting on what the Chancellor might announce, that we will see much change that will directly support SMEs. However, moving forward it is vital that this Government understands that if it wants to support businesses, then the needs of SMEs should be front and centre.