What do SMEs want from the next government? According to BFS’s latest SME Confidence Tracker, tax incentives, greater access to affordable finance, and support with energy costs top the wishlist. These demands underscore the pivotal role SMEs play in the economy and signal that the party able to address these concerns will capture the SME vote.
While the recent dip in inflation brings relief, many SMEs are in a holding pattern, delaying investments until after the election, and some until interest rates decrease. However, regardless of the election outcome, the prospect of economic and political stability could catalyse a surge in capital expenditure this summer, injecting vitality into the UK’s economic landscape.
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The 28 May edition of The Times featured a front-page article highlighting a letter signed by 121 founders, chief executives, and former leaders across diverse sectors such as financial services, retail, and manufacturing.
BFS’s Q1 2024 SME Confidence Tracker paints a revealing picture. A notable 37% of UK SMEs view the Labour Party as the best advocate for business interests, compared to 22% for the Conservatives. Yet, dissatisfaction with political parties is palpable, with one-fifth unable to identify a preferred party.
Moreover, over 40% of SMEs are deferring capital expenditure until post-election, hinting at potential investment acceleration. This sentiment aligns with the anticipation of interest rate reductions, with 53% of SMEs holding off on major investments until rates drop.
When considering policy reforms, SMEs are clear about their priorities. 61% advocate for further tax incentives, followed by calls for access to low-interest loans or grants for business expansion and job creation (47%), and assistance with energy bills (46%).
The election outcome will shape the trajectory of SMEs and the wider economy. As businesses await certainty, the next government must heed their calls for tangible support and enact policies that foster growth, innovation, and resilience. Only then can we truly harness the potential of SMEs and drive economic prosperity for all.
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By GlobalDataTheo Chatha is Chief Financial Officer at Bibby Financial Services (BFS)
