Turning promises into progress: why SMEs need more than words in the Autumn Budget

Concern about the Chancellor’s upcoming Autumn Budget is weighing on the minds of UK SME leaders. Despite the recent drop in inflation, which raises hopes of an interest rate cut in December, it’s been a challenging year for these businesses who continue to feel the impact of inflation (which earlier this year was almost double that of the Eurozone) as well as US tariffs, higher National Insurance Contributions (NICs) and the increased national minimum wage.

Faced with these hurdles, our latest research shows that 44 percent of SMEs are delaying any major investment decisions until after the Budget. Many are clearly hoping for measures that will help soothe today’s challenges.

Despite ongoing pressures, SMEs remain resilient. Sales expectations are at the highest level since 2022, with 72 percent expecting an increase over the next six months. Yet confidence is fragile – one in four (27%) still cite cashflow as a key challenge for their business, underscoring the need for continued support.

Turning ambition into action

While long-term measures – such as the Government’s pledge to slash electricity bills for 7,000 energy-intensive manufacturers from 2027 – are welcome, SMEs need decisive action that supports them now. Namely, they are seeking measures that lower costs and release capital for investment.

Nearly four in ten (37%) are looking to the Government for grants or low-interest loans that facilitate business growth and that boost their ability to hire. Giving businesses the funds and confidence to seize investment opportunities is vital and could help the Chanceller realise her ambition to end the “chronic stop-go cycle” of investment that she holds responsible for Britain’s weak economic performance.

The cost of doing business has shot up since the Spring Statement, which is a particularly heavy burden for many small businesses. Employers’ NICs have increased from 13.8 percent to 15 percent, pushing the average cost of employing a full-time minimum-wage worker from £1,872 to £2,879 a month. It’s clear that these rising NICs and minimum wage costs are biting – 42 percent of SMEs say they’ve hit overall expenses hardest, and 18 percent point to a resulting squeeze on cashflow.

While the call from SMEs is clear, with a quarter (25%) wanting the NICs rise reversed and 35 percent asking for lower business rates, the Chancellor’s insistence that she must “face the world as it is, not the world [she] wants it to be” suggests little room for manoeuvre.

Backing international trade

SMEs are demanding stronger support around international trade and the reduction of red tape. Almost a quarter (23%) are hoping for new trade agreements to help open new opportunities abroad, while one in five (19%) are looking for targeted help to counteract international tariffs. 

No doubt, exports to the US are a particular cause for concern – and the data serves as a reminder that global competitiveness depends not only on entrepreneurial drive, but also on a trade environment that enables smaller businesses to thrive.

Supporting the backbone of the economy 

While SMEs remain resilient, they lack the kind of decisive support we have seen afforded to bigger corporations. The Government’s recent £1.5 billion loan guarantee for Jaguar Land Rover was a bold move to protect one manufacturer from unforeseen shocks – but similar backing is needed for the millions of small firms facing predictable, persistent pressures every day. If the Government can act swiftly to safeguard a single company’s future, it should also find the means to shield SMEs from systemic threats.

In the face of rising costs, the Chancellor must provide robust financial support – not just promises. 

There is a clear opportunity for accountants and advisors to support too, with guidance on the range of financial options available to support growth, alongside any Government action that may be announced.

The Chancellor’s Budget on 26 November represents an opportunity for the Government to restore confidence, encourage investment and invigorate Britain’s small businesses. Labour promised to make Britain the best place in the world to start and grow a business, and the Autumn Budget will show how committed it is to that promise – and to proving that it was more than just a pre-election manifesto pledge.